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MS | Morgan Stanley MS Up 3 2 Since Earnings Report Can It Continue | It has been about a month since the last earnings report for Morgan Stanley NYSE MS Shares have added about 3 2 in that time frame
Will the recent positive trend continue leading up to its next earnings release or is MS due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers Morgan Stanley Q1 Earnings Beat on Trading ReboundTrading rebound higher interest income and improvement in advisory fees drove Morgan Stanley s first quarter 2018 earnings of 1 45 per share which handily surpassed the Zacks Consensus Estimate of 1 28 The reported figure was 45 above the prior year quarter As expected both equity trading income up 27 and fixed income currency and commodities income up 8 supported revenue growth Further equity underwriting fees up 8 advisory income up 16 and net interest income acted as tailwinds Also the company s capital ratios remained strong However lower debt underwriting fees down 2 was an undermining factor Moreover operating expenses recorded a rise Net income applicable to Morgan Stanley was 2 7 billion up 38 year over year Rise in Trading Income Aids Revenues Costs RiseNet revenues amounted to 11 1 billion a rise of 14 from the prior year quarter In addition it surpassed the Zacks Consensus Estimate of 10 5 billion Net interest income was 975 million jumping 26 from the year ago quarter This was largely driven by a rise in interest income Also total non interest revenues of 10 1 billion grew 13 year over year primarily supported by improvement in trading Total non interest expenses were 7 7 billion up 10 year over year Quarterly Segmental PerformanceInstitutional Securities Pre tax income from continuing operations was 2 1 billion increasing 22 year over year Net revenues of 6 1 billion grew 18 from the prior year quarter The rise was mainly driven by higher trading income advisory revenues and equity underwriting revenues partially offset by lower debt underwriting income Wealth Management Pre tax income from continuing operations totaled 1 2 billion up 19 on a year over year basis Net revenues were 4 4 billion increasing 8 from the prior year quarter driven by higher asset management fee revenues and net interest income partly offset by a decline in transactional revenues Investment Management Pre tax income from continuing operations was 148 million surging 44 from the year ago quarter Net revenues were 718 million a rise of 18 year over year The increase reflected higher asset management fees partly offset by fall in investment revenues As of Mar 31 2018 total assets under management or supervision were 469 billion up 11 on a year over year basis Strong Capital PositionAs of Mar 31 2018 book value per share was 39 19 up from 37 48 as of Mar 31 2017 Tangible book value per share was 34 04 up from 32 49 as of Mar 31 2017 Morgan Stanley s Tier 1 capital ratio Advanced Fully Phased in was 18 4 compared with 19 0 in the year ago quarter Tier 1 common equity ratio Advanced Fully Phased in was 16 1 compared with 16 6 in the prior year quarter Share RepurchasesDuring the reported quarter Morgan Stanley bought back around 22 million shares for nearly 1 25 billion This was part of the company s 2017 capital plan OutlookIn 2018 management expects net interest income growth to slow down based on anticipated funding mix and higher deposit betas than experienced in 2017 Management expects equity underwriting activity levels to remain healthy although near term issuances could be impacted by macroeconomic uncertainties geopolitical events and a typical seasonal slowdown For the Wealth Management segment the company projects the stability and trends of last several quarters to continue For the Investment Management segment it anticipates asset management fees to remain stable with potential unevenness in the investments line Management set an efficiency ratio target of less than 73 for 2018 and 2019 For the Wealth Management segment the company expects margins of 26 28 in 2018 and 2019 The target achievement will depend on execution of a number of revenue and expense initiatives including expense discipline business growth higher interest rates and loan growth The company expects effective tax rate of 22 25 for 2018 Since the vast majority of share based award conversions are placed in the first quarter the company expects the tax rate for the remaining quarters to be at the upper end of this range Over the medium term management targets a return on equity of 10 13 and return on tangible common equity ratio of 11 5 14 5
How Have Estimates Been Moving Since Then
It turns out fresh estimates flatlined during the past month There has been one revision higher for the current quarter compared to one lower
Morgan Stanley Price and Consensus VGM Scores
At this time MS has a great Growth Score of A though it is lagging a lot on the momentum front with a D However the stock was allocated a grade of B on the value side putting it in the second quintile for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Our style scores indicate that the stock is more suitable for growth investors than value investors
Outlook
MS has a Zacks Rank 2 Buy We expect an above average return from the stock in the next few months |
MS | KPMG On Real Estate Funds | The outsourcing of fund administration tasks in real estate is not a new idea But as KPMG says in a the marketplace has been slow to take the administrators up on their offerings So it may still be the wave of the future even though it has a past
For some Real Estate fund managers outsourcing doesn t work It may simply be that a manager has unique requirements that do not fit well into legacy fund administration operations and platforms Or it may be a bottom line issue managers have judged the administrators pricing to be out of line
But in the last three to five years real estate administrators have made a concerted effort to address such problems to develop beyond their legacy platforms and to add enough value to make their pricing economically compelling So Where is this going As a service provider both to the managers and to the administrators KPMG wanted to know
The Survey
The new paper results from a survey of 107 real estate investing professionals representing a wide range of entities fund managers sovereign funds diversified firms Its respondents make investments in every type of real estate from offices and homes to hotels infrastructure and RE debt They were asked how much do you outsource administrative tasks Which tasks What are the drivers of your outsourcing
The most pressing factor that gets managers to consider outsourcing their survey reveals is the desire to focus in house activities on core real estate functions Nearly as important are the need to reduce costs headcount a perception that third party costs are more palatable when passed on to their investors and the desire to improve process performance service delivery
Lift Outs versus Organic Growth
Part of the paper focuses on the question of who gets into the business of offering administrative services to these managers and the mechanics of how they do it
As the paper observes there has been a flurry of deals in which firms have bought up an existing administrative platform in order to establish themselves in the industry For example in 2013 State Street integrated Morgan Stanley NYSE MS Real Estate Investing s fund servicing operations That integration involved 150 staff and a proprietary real estate servicing technology
But other firms have built up their own operations in house rather than buying them This is often described with a biological metaphor organically growing the outsourcing business This forfeits the benefit by association of a lift out and the opportunity to pick up marquee clients on the target operation s rolodex but it may avoid corporate culture clash
What Job Gets Outsourced
But let s turn back to the managerial side of the equation If managers are outsourcing in order the better to focus on their core operations what are the not so core operations that they are looking to offload
The number one activity fully or partially outsourced is tax preparation and filing Unsurprisingly accounting firms are usually the recipients of this hand off
Fifty five percent of real estate funds say that this is at present fully outsourced Another 29 say it is partially outsourced Another 1 say they plan to outsource it leaving a stubborn 15 do it ourselfers in the tax realm
Investor and performance reporting on the other hand is only seldom 3 fully outsourced Another 14 of the time it is partially outsourced Another 9 of respondents say that they plan on outsourcing it leaving 74 doing this themselves A reasonable inference is that reporting to ones investors is more of a core activity than reporting to the IRS or analogous authorities
What about reporting to regulators Regulatory reporting falls in between the tax and the investors case on the spectrum of outsourceability Fully outsourced at present 11 Partially outsourced 22 Plans to outsource 4 Determined do it ourselves 63
What are Managers Looking for
KPMG also asked managers what they re looking for in a service provider when they outsource What differentiates one potential provider from another
The most common answer here is real estate expertise The second most common is a strikingly similar answer given to whom the question was directed experience with funds and structures similar to that of the managers portfolio
The report concludes with some words for those managers who may have looked at outsourcing at some earlier time and shied away It is an option that is worth another look |
MS | Central Bank Cryptocurrencies Debate Rages On | The thought of a central bank cryptocurrency may seem like a bit of an oxymoron but apparently some countries are looking into the plausibility of creating one If any of them ever become a reality central bank cryptocurrencies will likely be linked to fiat currencies and be more like digital versions of them rather than true cryptocurrencies After all it s hard to imagine any central bank in any country creating a digital currency that s totally anonymous However that hasn t kept regulators in some countries from discussing the topic
The great debate about central bank cryptocurrencies
Morgan Stanley NYSE MS strategist Sheena Shah released a report on central bank cryptocurrencies this month outlining what regulators are saying about the topic in various countries She explained that multiple central banks are talking about introducing a digital form of cash using various platforms including everything from current platforms to others based on the blockchain
Regulators who are thinking about central bank cryptocurrencies see it as potentially a way to better monitor and track currency flows Shah doesn t believe central banks will use bitcoin or any other private blockchain networks Instead she expects regulators to create their own digital currencies She also noted that there aren t many transactions that do support cryptocurrencies for payments which means that they don t currently exert a significant influence on macro outcomes
Rather she believes that regulators are focused on understanding digital currencies from the perspective of financial stability
Cryptocurrencies and interest rates
One particularly interesting theory expressed by Shah is in connection with interest rates Several major central banks around the world resorted to negative interest rates for a time as they tried to spur recovery in the global economy Shah believes that a 100 digital monetary system might enable central banks to push rates even deeper into negative territory
She explained that when there is paper currency circulating freely regulators are limited in how low they can push deposit rates Theoretically the only way negative rates can spread throughout an economy is if all deposits are held in the banking system
However digital currencies may enable negative rates on all of the money that s in circulation throughout the entire economy She added that this theory is challenged though by the reality that deep and long standing negative rates eventually become a problem for central banks The result would be that regulators would be forced to go direct to currency users to implement monetary policy reducing leverage in the system significantly and cutting GDP growth
According to Shah this debate is still theoretical so it s unclear what central banks might decide about it
Sweden considers an e krona
One country in which central bank cryptocurrencies are being discussed more seriously than in others is Sweden and according to Shaw the country has the greatest percentage of card payments among developed countries Sweden also has low levels of cash currently in circulation as regulators have taken multiple steps to limit the amount of cash that s available Shah also said that other countries with little cash circulating may be more interested in central bank cryptocurrencies than other countries
She also said that Sweden is considering creating an e krona because regulators are worried about cash usage falling too fast which she said could make it difficult to maintain the cash infrastructure Swedish regulators are now soliciting feedback from tech firms about how they could implement an e krona
Although she didn t mention Russia regulators there are also close to creating a cryptoruble Stratfor said last month The Kremlin apparently plans to profit off all the illicit monetary activities that go on in the country by attaching a 13 transaction fee whenever investor buy cryptoruble without documenting where their funds came from
is another example of a national digital currency although it was created to enable the nation to dodge U S sanctions amid a climate of hyperinflation China has also said it plans to create a digital currency as it tries to eliminate private cryptocurrencies by banning them
Japan isn t planning a central bank cryptocurrency
An official with the Bank of Japan said last month at a conference with the International Monetary Fund that they don t plan to create their own cryptocurrency because of concerns about financial stability It makes sense as Shah reported that the Asian nation has one of the highest levels of cash in circulation relative to its GDP among both developed and emerging markets Last year Japanese regulators said they aim to double cash less payments over the next decade by encouraging use of the blockchain
However even though Japanese regulators say they don t plan to create a central bank cryptocurrency Shah said she wouldn t be surprised if they did create one at some point
Debate about central bank cryptocurrencies rages on
Meanwhile the debate about central bank cryptocurrencies continues in developed countries Just this week Federal Reserve Governor Lael Brainard said that central bank cryptocurrencies present too great of a risk She warned that such a network could make it easy for hackers to attack the monetary system while also providing an easy way to launder money She also told a digital currency forum in San Francisco that she sees no compelling demonstrated need for a Fed backed cryptocurrency
Further she said that just creating a central bank cryptocurrency would present massive technological challenges and present other risks such as making it harder for banks to make loans for certain activities
Brainard isn t the only Fed official who s against creating a Fed backed digital currency Officials with the St Louis Federal Reserve also argued against a Fed backed cryptocurrency last month explaining that the very nature of a cryptocurrency runs counter to what central banks do They explained that it would theoretically be easy for a central bank to create its own digital currency based on the Ethereum blockchain or on a new blockchain created by the central bank itself
Cryptocurrencies versus digital currencies
However they said creating a Fedcoin could create immense reputational risk because it could be used for money laundering or by terrorists to buy weapons They also said banks would begin to question why they should be required to follow know your customer and anti money laundering regulations when the Fed itself is undermining these same regulations by creating an anonymous cryptocurrency with permissionless access
Essentially they pointed out that a is only a cryptocurrency when it offers an anonymous way to complete transactions something central banks probably wouldn t or shouldn t do However the St Louis Fed officials are in favor of a fiat currency backed digital currency
At the end of the day it seems like the debate about central bank cryptocurrencies hangs at least partially on semantics It s one thing for regulators to create a digital currency backed by their country s own fiat currency and another thing for them to build a blockchain based network that offers all the anonymity of major cryptocurrencies |
MS | Riding The Bull Time To Increase Equity Exposure | One of the most dangerous sports in America lasts a total of eight seconds bull riding In bull riding a rider must stay on top of the bucking bull while holding onto the bull rope with one hand for eight seconds and not touching the bull or himself with his free hand If he does that it is a qualified ride If he gets bucked off before eight seconds it is a no score
For investors the difference between success and failure in riding the bull often comes down to knowing when hang on and when to dismount the bull market The worst outcome is getting bucked off and facing a really p ssed off bull looking to stomp or gore whoever is closest to it
In this past weekend s missive I updated the projected pathways for the market given the recent SPX break above the cluster of resistance surrounding the 100 day moving average To wit
As shown in the chart above this pause sets the market up for a continuation of pathway 2a to the next level of resistance However there is a reasonable possibility that has opened up of a new path 2c which could lead to another retest of the 200 dma if the market breaks the current support
Pathway 2c is currently a binary outcome and will only exist next week Either the market will move higher next week and continue following pathway 2a or it won t Monday will likely tell the tale and I will update this analysis in Tuesday s report
I can now update that analysis with yesterday s move higher on reports the trade war with China has been put on hold to negotiate a reduction in the trade deficit
As I stated pathway 2c was binary Given our analysis is based on the end of week close if the market breaks above last week s highs we will remove pathway 2c
Where does that leave us now in terms of our portfolio models
When the market broke above the 100 dma we used some of the cash we had raised on previous rallies to increase the allocation to equities in our portfolios However we still maintain an overweight position on cash currently as a hedge against potential market risk
This week we are looking to add further exposure However before we do that we need some confirmation from the market of a push higher While the markets moved higher yesterday it remains contained in a short term trading range We are looking to add further exposure to equities if the market can close above last week s closing high
Importantly while we are increasing equity exposure we do so under the following guidelines
We are still overweight cash in portfolios as the risk of a failure has not been absolved as of yet
Positions are carrying a tighter than normal stop loss level and
We will quickly add negative hedges as necessary on any failure of support
Earnings Remain The Biggest Concern
While market performance has certainly improved over the last couple of weeks it remains overall quite disappointing relative to the jump in Q1 earnings As noted by last week
Earnings growth has been solid even as stocks have been restless It makes you wonder if earnings results matter in the near term The chart below reinforces the notion that earnings beats haven t mattered
As you can see the average price change from 2 days before the report to 2 days after the report shows earnings beats have led to a 0 3 decline instead of a 1 1 increase which is the 5 year average The stocks meeting and missing results have also fallen more than average The beat portion of this chart is the most important because most firms beat results It s obviously important to figure out if stocks are actually selling off when bad results come out
There are two important things to remember about earnings
The first is that earnings consistently beat estimates as heading into the earnings to ensure a high beat rate
The second is that today more than ever before through accounting gimmicks and share repurchases
But more importantly the market may be sniffing out the specific problem I discussed recently estimates have gone parabolic
Despite a recent surge in market volatility combined with the drop in equity prices analysts have sharpened their pencils and ratcheted UP their estimates for the end of 2018 and 2019 Earnings are NOW expected to grow at 26 7 annually over the next two years
The chart below shows the changes a bit more clearly It compares where estimates were on January 1st versus March and April Optimism is well exceedingly optimistic for the end of 2019
It is not just me that is scratching my head over the optimism As my friend noted yesterday so is Dr Ed Yardeni who recently penned much of the same
I would like to try some of whatever industry analysts are smoking You can compare my earnings forecasts to their consensus estimates on a weekly basis in YRI S P 500 Earnings Forecast on our website I say tomato They say tomahto
My earnings per share estimate for 2018 is 155 00 up 17 4 y y The analysts continue to up the ante and are currently at 160 40 up 21 5 My estimate for 2019 is 166 00 up 7 1 Theirs is 175 72 up 9 6 Perhaps the analysts are just high on life
Their growth estimate for next year seems too high to me since I expect 2019 earnings growth to settle back down to the historical trend of 7
However analysts tend to be too optimistic and often lower their estimates as earnings seasons approach
While the surge in earnings estimates gives cover for Wall Street analysts to predict surging asset prices the risk has historically been to the downside This is because Wall Street has historically over estimated earnings by about 33 on average
Yes while a vast majority of companies have beaten estimates in the first quarter it is only the case because analysts are never held to their original estimates If they were 100 of companies would be missing estimates currently
At the beginning of January analysts overestimated earnings by more than 6 share reported versus where they are currently It s not surprising volatility has picked up as markets try to reconcile valuations to actual earnings
Economic Growth Is Set To Explode Right
Most likely not
While there was a short term boost to economic growth last year which was driven by a wave of natural disasters in the U S the boost from rebuilding is now beginning to fade
As noted recently by Morgan Stanley NYSE MS
While we are not yet seeing evidence of falling economic growth we expect with near certainty that we will have a peak rate of change in S P 500 y y earnings growth by 3Q thanks to the spike created by the tax cuts This was something we cited in our 2018 outlook and one of the primary reasons why we thought P Es would contract The good news is that this has already occurred
The risk for further P E compression comes if markets start to worry that it s not just a deceleration of growth on the backside of the peak but an outright decline in growth Consensus forecasts do not expect negative growth but it s worth considering the potential risk of disappointment later this year and in 2019 for two reasons
First earnings growth expectations for 4Q and 2019 look high to us given the extremely difficult comparisons created by the tax cuts
Second even in the absence of an economic recession or material slowdown we do see growing risk to y y growth of consumer spending due to the extraordinary one time boosts that began late last year hurricane relief tax cuts and the interest in cryptocurrency not to mention the seeming euphoria in stock markets in January that looks unlikely to be repeated
This suggests that the difficult comparisons are not only the result of tax cuts but perhaps better top line growth that can t be repeated I think it s too early to worry about this risk today but it s not too early to start thinking about it and watching for signs of consumer behavior becoming more tempered I would also throw in the price of crude oil as an important consideration given that our economics team estimates that close to one third of the tax cut benefit to the US consumer may have already been removed by the rise in oil and gasoline prices
The economy is sensitive to changes in interest rates This is particularly the case when the consumer which comprises about 70 of the GDP calculation is already heavily leveraged With corporations more highly levered than at any other point in history and dependent on bond issuance for dividend payments and share buybacks higher interest rates will quickly stem that source of liquidity Notice that each previous peak was lower
With economic growth running at lower levels of annualized growth rates the bang point for the Fed s rate hiking campaign is likely substantially lower as well Currently there are few if any Wall Street analysts expecting a recession at any point in the future Unfortunately it is just a function of time until a recession occurs and earnings fall in tandem
More importantly the expectation for a profits driven surge in asset prices fails to conflate with the reality that valuations have been the most important driver of higher stock prices throughout history
While we are increasing equity exposure from a trading perspective we remain much more concerned by the in the longer term from the underlying issues which have been unkind to forward returns
Yields are rising which deflates equity risk premium analysis
Valuations are not cheap
The Fed is extracting liquidity along with other Central Banks slowing bond purchases and
Further increases in interest rates will only act as a further brake on economic growth
Wall Street is notorious for missing the major turning of the markets and leaving investors scrambling for the exits
This time will likely be no different
We remain cautiously optimistic and are happy just riding the bull for now
As every good Texan knows all bull riders get thrown if they stay in the saddle too long The trick is to hold on tight with one hand and dismount and run for safety when the buzzer sounds
The consequences of getting thrown have not been kind |
MS | Energy Stocks To Rally Further | Crude oil prices which have recently started trading by as much as 80 per barrel during last Friday s trading session have raised the outlook for energy company stocks leading to numerous analysts giving a buy rating as the prices of oil is expected to go higher in the coming months
Morgan Stanley NYSE MS forecasted that Brent crude prices may hit 90 per barrel by the year 2020 which would project that prices of the commodity will remain around the 70 to 80 per barrel for a while Meanwhile other analysts are expecting crude to hot 100 per barrel in a couple of months
The numerous upbeat outlook on crude prices raised the positive outlook on the valuation of energy companies and their stocks which would encourage higher cash flow and an opportunity to stabilize any rocky balance sheet Analysts have commented on how a growth in free cash flow and the balance sheet of energy companies have contributed to higher valuations in the past especially for energy companies
By last week energy stocks were able to record their longest rally in more than ten years with analysts forecasting more room for growth due to the bullish run of crude prices over the last month fueled by U S President Donald Trump s decision to withdraw from a nuclear deal with Iran
The United States ending a nuclear deal with Iran will bring back heavy sanctions to the country affecting its production and crude oil exports leading to a lesser global supply This pushed oil prices higher over the past month even prior to Trump s official decision when the U S president hinted his plans to end the deal
The Organization of Petroleum Exporting Countries has also extended its efforts in stabilizing oil prices as well as helping prevent a global oversupply through a collective agreement to cut daily production This agreement has been extended by the organization numerous times and is currently set to run until the end of the year
Oil prices have suffered last year when a sudden and continuous rise in the crude production of the United States raised market concerns on the country s role in the global oil market as well as on how it has weighed in on various and collective efforts to prevent a global gut
Just recently prices of crude products such as petrol and diesel were seen at a record high Rising oil prices are set to raise the outlook for energy stocks and oil companies in the upcoming weeks or months Price of Brent crude futures was last seen at around 79 95 per barrel from its previous highs of 80 50 while WTI crude futures added 0 5 to 72 70 per barrel Crude prices may lose ground later this week when the American Petroleum Institute as well as the Energy Information Administration delivers its weekly report Analysts are currently expecting a decline of around 2 8 million barrels |
MS | Has Morgan Stanley MS Outpaced Other Finance Stocks This Year | Investors focused on the Finance space have likely heard of Morgan Stanley NYSE MS but is the stock performing well in comparison to the rest of its sector peers By taking a look at the stock s year to date performance in comparison to its Finance peers we might be able to answer that question
Morgan Stanley is one of 830 individual stocks in the Finance sector Collectively these companies sit at 9 in the Zacks Sector Rank The Zacks Sector Rank considers 16 different sector groups The average Zacks Rank of the individual stocks within the groups is measured and the sectors are listed from best to worst
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months MS is currently sporting a Zacks Rank of 2 Buy
Over the past three months the Zacks Consensus Estimate for MS s full year earnings has moved 4 69 higher This shows that analyst sentiment has improved and the company s earnings outlook is stronger
According to our latest data MS has moved about 1 03 on a year to date basis Meanwhile the Finance sector has returned an average of 1 64 on a year to date basis This means that Morgan Stanley is outperforming the sector as a whole this year
Looking more specifically MS belongs to the Financial Investment Bank industry which includes 22 individual stocks and currently sits at 44 in the Zacks Industry Rank On average this group has gained an average of 5 35 so far this year meaning that MS is slightly underperforming its industry in terms of year to date returns
Investors with an interest in Finance stocks should continue to track MS The stock will be looking to continue its solid performance |
JPM | Palladium ETF Is Soaring Will The Trend Continue In 2020 | Palladium has seen a strong run this year on demand supply imbalance despite weakness in the global auto sector The rally strengthened with the metal hitting a series of new highs lately topping 1 900 per ounce for the first time ever In fact the metal has climbed for 13 consecutive days representing the longest stretch since mid 2014 With this palladium has risen nearly 50 so far this year Global Commodity TrendsThe latest gain was brought in by tight supply conditions due to production problems in South Africa the world s second largest palladium supplier This is because South African mining companies halted operations for the sixth consecutive day in response to the country s largest power blackouts in more than a decade Harmony Gold NYSE HMY Impala Platinum and Sibanye Stillwater all are being forced to cut production One of the market participants said that palladium has been in deficit for the past seven years and will continue to be so in 2020 and 2021 While supply remains limited demand has been strong owing to its large consumption in the auto sector read This is because a global shift from diesel to gasoline and hybrid vehicles has led to higher use of the metal and resulted in speculation of supply deficit Notably palladium is used to make catalytic converters in gasoline automobiles that reduces emissions Additionally increasingly stringent regulations to crack down on pollution from vehicles globally are pushing up demand for palladium in autocatalysts for gasoline powered cars Notably China the biggest auto market has boosted the metals value even more as all cars manufactured from 2020 will contain around 30 more palladium Given the limited supply and strong global demand one analyst at Citigroup NYSE C expects palladium prices to jump to 2 500 by mid 2020 Other FactorsApart from supply demand dynamics global easing monetary policies are acting as a tailwind for the commodity The Fed has cut interest rates three times this year keeping the U S dollar under pressure A weak dollar makes dollar denominated assets attractive for foreign investors raising the appeal for commodities Moreover safe haven demand due to trade gyrations and geopolitical tension is also facilitating the rally in this precious metal read That said palladium is poised to surge even further and investors could tap this opportune moment with the help of the pure play Aberdeen Standard Physical Palladium Shares ETF PALL in FocusThe fund seeks to match the price of palladium It owns palladium bullion in plate or ingots kept in Zurich or London under the custody of JPMorgan Chase NYSE JPM Bank The product has amassed 289 5 million in its asset base and trades in lower volume of about 23 000 shares a day It charges 60 bps in annual fees and has gained about 50 4 in the year to date timeframe The fund has a Zacks ETF Rank 3 Hold with a High risk outlook see Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
MS | Trump Wants China Deal and Stocks Rally He May Not Get Both | Bloomberg President Donald Trump wants the stock market to celebrate if he strikes a trade deal with China Investors may struggle to deliver
The outcome could fall short of the definitive resolution of trade tensions that equities investors have priced in Instead the most likely scenario is an accord with few details or a paucity of specifics on which tariffs will stay and which may go
Or as Secretary of State Michael Pompeo pointed out this week Trump could walk away from the table during a meeting with China s Xi Jinping as he did with North Korea s Kim Jong Un potentially taking trade tension to a new level
The reality is that trade friction could remain a fixture of American policy Trump the self proclaimed Tariff Man has drawn bipartisan support for his tough stance with China Even Senate Minority Leader Chuck Schumer has praised the president for using tariffs as a negotiating tool
The flaw in how the market thinks is that it s less concerned than it should be about the longer term outlook for free trade and what it could mean for corporate profitability and whether the current global trading system is going to work as it has in the future said Ronald Temple co head of multi asset and head of U S equity at Lazard Asset Management
Trump s dilemma as he seeks to reignite the rally that drove stocks higher the past two months is that he s raised expectations His tweets in the past week that negotiations are moving along nicely means markets may be vulnerable if the pact doesn t live up to its billing
Sunday s Example
A prime example of what s at stake came Sunday when reports surfaced that an accord eliminating tariffs was imminent While stock futures registered small gains in the hours after the news U S equities have been down in the three days since
Anything could happen as Trump himself said on Wednesday It s either going to be a good deal or it s not going to be a deal
He s pushing for U S negotiators to close a trade deal with China soon concerned that he needs a big win on the international stage and the stock market bump that would come with it in advance of his re election campaign He has taken note of market gains that have followed signs of progress and has told his advisers he s concerned that the lack of an agreement could undermine stocks Bloomberg News has reported
Trump has repeatedly taken credit for equities strength citing his own economic policies as the key driver The S P 500 has risen around 30 percent since he was elected and is up about 10 percent in 2019
Global Risk
Investors view the outlook for the relationship between the world s two largest economies as a possible tipping point that could spark a sustained slowdown in global growth Markets appear to have a binary set of expectations from Trump on trade and he has a similarly black and white view of how investors would act on a deal
The best case scenario for investors is no more tariffs
In the short term the best news is that tariffs go to zero said Michael Kushma chief investment officer for global fixed income at Morgan Stanley NYSE MS Investment Management If Trump walks away from the negotiating table during Xi s visit markets would take that very negatively Kushma said The market is not ready at all for any further escalation
Chances are the U S may push to retain some tariffs to force China to stick to concessions With trade weighing on the outlook for both economies the Federal Reserve noted it as a headwind in its latest Beige Book neither side can afford that scenario
Bonds Too
Bond traders are also keenly focused on the trade negotiations the outlook for the Fed may hinge on a deal Rates markets have more or less given up on policy tightening this year after the Fed s dovish pivot But that could change on an accord
If you resolve the China trade issue that removes one potential significant risk to global growth which theoretically could make the Fed more willing to raise at some point said Stephen Myrow managing partner at Beacon Policy Advisors in Washington and a former Treasury official
And therein lies the catch that exposes Trump s goal of trying to rally markets on a deal A turbocharged equities market could very well revive Fed rate hike bets for 2019
Chalk up that risk higher borrowing costs as something that might work to cap gains in U S stocks
Updates market performance |
MS | Italian appeals court rules it cannot hear 3 billion case against Morgan Stanley | ROME Reuters An Italian appeals court has ruled it cannot hear a case against Morgan Stanley NYSE MS in a derivatives case which included a request for 2 7 billion euros 3 billion in damages from the U S bank The ruling seen by Reuters in a document filed on Thursday confirms a decision taken in June by Italy s Court of Accounts saying it did not have jurisdiction in the matter The case revolves around Morgan Stanley derivative transactions made by the Italian state between 1995 and 2005 and terminated in December 2011 and January 2012 The Italian state incurred large losses on its derivative positions State prosecutors had argued some contracts negotiated with the U S bank were speculative in nature and contained termination clauses that were overly advantageous to the bank Morgan Stanley said it welcomed the judgment and did not comment further In the past the bank has repeatedly said the claim was groundless The case also includes claims against former senior officials at Italy s Treasury for a total of 1 18 billion euros All the defendants have denied any wrongdoing It s the right ruling which fully reflects the defence s reasons said Mario D Urso the lawyer representing former Treasury Director General Vittorio Grilli Prosecutors in the case can appeal the decision to Italy s Supreme Court |
MS | The World Economy Just Had a Rough Week | Bloomberg The world economy risks remaining weak for a while longer
On Friday alone reports showed the slowest U S hiring in more than a year a slump in Chinese exports and an unexpected decline in German factory orders
With economies already undershooting expectations by the most since 2013 and the OECD slashing its forecasts worries are mounting that the recent slowdown will last for longer although recession fears for now remain limited
The soft patch puts the U S and China under pressure to settle their trade war which has bludgeoned sentiment and leaves central banks needing to keep monetary policy looser than they were planning into this year
Such forces may still prove enough to drive a pickup and next week witnesses further health checks ranging from retail sales data in the U S to industrial statistics from China and the euro region
The trends in the global economy have certainly concerned markets said Philip Shaw chief economist at Investec in London It s material enough to make a difference to the policy outlook
The week ended with news that U S payrolls grew just 20 000 in February way below the 180 000 median forecast in a Bloomberg survey of economists
Deutsche Bank DE DBKGn is already warning the U S economy could grow less than 1 percent this quarter and the bout of labor market weakness will sew worries about the spending power of consumers On Monday in Washington the government will release retail sales data for January after December witnessed the worst slump in nine years
Elsewhere exports from China tumbled almost 21 percent in February the most in three years while German factory orders unexpectedly dropped 2 6 percent in January the most since June
That was just one day Manufacturing purchasing manager indexes are in contraction territory in China Japan and the euro area where there s mounting concern that the bloc s economy and markets risk repeating Japan s lost decades of growth
There are caveats U S wage gains were the fastest of the expansion in February and JPMorgan Chase Co NYSE JPM predicts salaries in rich nations will start advancing by more than 3 percent this year Financial conditions have also turned more relaxed after tightening into the end of last year with the MSCI World Index of stocks up almost 9 percent in 2019
There s a case that as we move through this that growth will pick up in the second half of the year said David Hensley director of global economics at JPMorgan in New York There are supports to keep things from getting too weak
Much will depend on whether Presidents Donald Trump and Xi Jinping can resolve their trade dispute clearing a fog of uncertainty that s stopping businesses from investing and hiring If the U K can avoid tumbling out of the European Union without a divorce deal that would also help
Trump postponed an increase in tariffs that had been scheduled to be imposed on China this month but no date has been set for the two leaders to meet and much remains unsettled Confidence that differences will narrow is one reason Morgan Stanley NYSE MS economists say this quarter will mark the trough of the global slowdown
Another case for optimism that the worst may soon be over is that some governments and central banks are starting to dole out aid The problem there is that they will then have less firepower to deploy if growth really falters
China s government this week announced a cut to its value added tax of as much as 800 billion yuan 119 billion as it lowered its goal for growth to a range of 6 percent to 6 5 percent for 2019 That s down from about 6 5 percent last year
And the European Central Bank became the first of the major central banks to unveil more stimulus in the form of new cheap loans for banks which came alongside a commitment not to raise interest rates until 2020
In the U S Federal Reserve Chairman Jerome Powell speaks on Friday night after he and colleagues recently paused their campaign of interest rate hikes New York Fed President John Williams NYSE WMB said this week that he and colleagues can afford to wait and watch incoming data
What Bloomberg s Economists Say
This is a moment of heightened uncertainty for global growth A Fed pause trade truce and China stimulus are all reasons for optimism From U S jobs to China exports the most recent data paint a more pessimistic picture We continue to expect stabilization in the second quarter Risks to that call are tilted to the downside
Tom Orlik chief economist |
MS | Morgan Stanley Says Market Is Overpricing Goldilocks Scenario | Bloomberg It s possible that global economic growth will stabilize while inflationary pressure remains absent and the top central banks stay on hold for the next 24 months But that scenario is being overpriced by the markets according to Morgan Stanley NYSE MS
At the same time investors are too dismissive of the tails in which global growth rebounds more strongly amid China s stimulus or the first quarter s notable earnings weakness had a bigger market impact according to strategists led by Andrew Sheets
The market is too confident in a central scenario the strategists wrote in a note Sunday Don t buy into Goldilocks they said of the name given to the scenario of solid but non inflationary growth
Morgan Stanley has been skeptical about the strength of the global economy for some time Sheets and others wrote in a note in early February that the dollar had likely peaked and the market was underestimating the potential for the currency to fall based on decelerating U S growth That hasn t proven true so far with economies other than the U S showing weakness and the European Central Bank saying it would add stimulus
The strategists said in the Sunday note that they expect major market reversals including a cyclical peak for the greenback outperformance of emerging market assets and value scoring over growth They also recommend buying fixed income volatility
This year will see a turning point in macro the strategists said They see challenges to all parts of the market s narrative here across growth inflation and policy expectations |
JPM | JP Morgan Chase is set to report fourth quarter earnings here s what the Street expects | J P Morgan Chase posted profit and revenue that exceeded analysts expectations on a surge in fourth quarter trading revenue CEO Jamie Dimon said the investment bank produced record fourth quarter revenue Bond trading revenue surged 86 to 3 4 billion exceeding the 2 61 billion estimate by roughly 800 million as fixed income desks were humming particularly in securitized products and rates |
JPM | JPMorgan Earnings Revenue Beat in Q4 | Investing com JPMorgan reported fourth quarter earnings that beat analysts expectations on Tuesday and revenue that topped forecasts
The firm reported earnings per share of 2 57 on revenue of 29 21B Analysts polled by Investing com anticipated EPS of 2 35 on revenue of 27 87B That compared to EPS of 1 98 on revenue of 26 8B in the same period a year earlier The company had reported EPS of 2 68 on revenue of 30 06B in the previous quarter
JPMorgan NYSE JPM is continuing to see strength in its consumer and investment banking units Although a low interest rate environment going forward may not help the lender after three rate cuts by the Fed it could still fuel loan expansion helping JPM in increasing its lending activity That s what JPM s Chief Executive Officer Jamie Dimon pointed out last year when he told analysts that the near term outlook for credit is relatively rosy said Investing com analyst Haris Anwar
That earnings momentum has kept JPM shares well supported last year As long as the economy and consumer spending remain robust there is no major threat to the U S lenders including JPMorgan NYSE JPM whose shares hit a record high early this month after surging more than 35 in the past year
JPMorgan follows other major Financial sector earnings this monthOn January 8 Jefferies Financial reported fourth quarter EPS of 0 62 on revenue of 1 11B compared to forecasts of EPS of 0 61 on revenue of 791 1M
PennyMac Financial earnings beat analysts expectations on October 31 2019 with third quarter EPS of 1 9 on revenue of 436 35M Investing com analysts expected EPS of 1 31 on revenue of 381 01M
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
JPM | JPMorgan Chase EPS beats by 0 22 beats on revenue | JPMorgan Chase NYSE JPM Q4 GAAP EPS of 2 57 beats by 0 22
Revenue of 28 3B 8 4 Y Y beats by 610M Managed revenue of 29 2B
Shares 0 9 PM
Press Release |
JPM | JPMorgan Q4 Earnings Blow Past Expectations on Strong Consumer Markets | By Geoffrey Smith
Investing com JPMorgan Chase s NYSE JPM earnings blew past expectations in the final quarter of 2019 rising 30 from a year earlier to 2 57 a share a full 10 above consensus forecasts
Revenue likewise far exceeded expectations rising 9 on the year to 29 21 billion
Analysts polled by Investing com had anticipated EPS of 2 35 on revenue of 27 87 billion
The results were helped by an 8 increase in consumer loans reflecting the sustained strength of U S spending
The U S consumer continues to be in a strong position and we see the benefits of this across our consumer businesses chairman and CEO Jamie Dimon said in a statement
The bank s corporate and investment bank also chipped in handily with total markets revenue rising 56 on the year to 5 0 billion
Reported net income edged down from the previous quarter to 8 5 billion due in part to the sale of home loans
Return on tangible common equity a core measure of profitability was 17 down from 18 in the previous quarter but up from 14 in the final quarter of last year which was marked by extreme volatility in global markets
JPMorgan NYSE JPM is continuing to see strength in its consumer and investment banking units said Haris Anwar an analyst with Investing com Although a low interest rate environment going forward may not help the lender after three rate cuts by the Fed it could still fuel loan expansion helping JPM in increasing its lending activity
As long as the economy and consumer spending remain robust there is no major threat to the U S lenders including JPMorgan NYSE JPM he added
JPMorgan s shares were up 1 8 in premarket trading after the results just shy of the record high of 141 10 that they hit at the start of the year The shares have risen 30 since August as the threat of a U S recession has dimmed
Earnings from Wells Fargo NYSE WFC and Citigroup NYSE C are also expected before the open |
JPM | Stocks U S Futures Set for Losses Despite JPMorgan Beat | By Peter Nurse
Investing com Wall Street is set to open lower Tuesday as investors bank recent gains and look to the start of the earnings season with a degree of caution despite an impressive lead from JPMorgan Chase NYSE JPM
Futures for the S P 500 were trading 2 points or 0 1 lower by 07 15 ET 12 15 GMT futures for the NASDAQ were 11 points or 0 1 lower while the DJI futures contract outperformed up 4 points or 0 1
This push back comes after the major U S equity indices posted new highs on Monday The broad based S P 500 cash index gained 22 78 points or 0 7 to close at 3288 13 a new high The technology heavy Nasdaq Composite also ended the day at a record climbing 95 07 points or 1 to 9273 93 The Dow Jones Industrial Average added 83 28 points or 0 3 to close at 28 907 05 just 0 2 below last week s record high
All eyes now are on the start of the U S reporting season starting today with banking giants JPMorgan Chase NYSE JPM Citigroup NYSE C and Wells Fargo NYSE WFC The banks are often taken as a rough proxy for the health of the broader economy and are thus likely to set the tone of the overall earnings season
JPMorgan NYSE JPM impressed with its fourth quarter release with earnings per share coming at 2 57 compared with 2 35 expected and revenue was 29 21 billion above the expected 27 96 billion Its shares climbed 1 8 in premarket trading
These banks have had to cope with the Federal Reserve cutting interest rates three times last year Lower rates reduce what banks can charge on loans but they also cut what they have to pay for deposits
Still any market pullback is unlikely to be severe as global economic sentiment remains healthy There was a boost to this overnight as the U S revoked its decision taken last summer to call China a currency manipulator just days before the two countries are set to sign phase one of a trade deal
This phase one deal would prevent any further tit for tat tariffs and roll back some existing U S tariffs in Chinese goods although it would leave many others still in place and will also not address major concerns about China s treatment of intellectual property and its extensive subsidies for state owned companies
Elsewhere crude oil bounced while gold futures lost ground as investors left the safe haven amid broadening optimism
U S Crude Oil WTI Futures traded up 0 7 at 58 51 by 06 55 AM ET 11 55 GMT International Brent Oil Futures also climbed 0 9 to 64 78 Gold futures for February delivery on New York s COMEX fell 0 4 to 1 544 05 |
MS | Has Oil Moved Too High | The price of oil is steady in today s trading session hovering around 70 a barrel having risen significantly over the last week on the back of US President Donald Trump s decision to reintroduce sanctions on Iran
How this will affect the oil price as the year unfolds remains to be seen but some are already speculating that it will be limited as not all countries are on board and other players in the market will be ready to step in and fill the hole left in the market due to the sanctions
The two things that would shift the market in a bearish direction is if the Saudis or Kuwaitis say we are going to offset lost Iranian supply or if major buyers in Europe say they will ignore the decision and continue buying Iranian crude said Michael Lynch president of Strategic Energy Economic Research in Winchester Massachusetts
Another reason the oil price may not move much higher as the sanctions on Iran will not be enough to offset the surge in production from US shale drillers
The US added 10 rigs to their overall count last week which marks the highest level in over 3 years and all this action may not be factored into current prices
The rig count moves tend to lag oil gas price inflections by 3 4 months suggesting that the current demand run rate does not fully reflect the recent crude price rally said analysts from Morgan Stanley NYSE MS
This implies that we could see another 70 rigs added market wide by year end They added |
JPM | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio December 03 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Iron Strategic Income Fund Investor IRNIX This fund has an expense ratio of 1 45 and a management fee of 0 65 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest IRNIX is an Allocation Balanced mutual fund Allocation Balanced funds look to invest across asset types like stocks bonds and cash and including precious metals or commodities is not unusual these funds are mostly categorized by their respective asset allocation The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Gabelli Focus Five Fund I GWSIX Expense ratio 1 46 Management fee 0 65 Over the last 5 years this fund has generated annual returns of 0 95
Glenmede Long Short Fund GTAPX Expense ratio 2 46 Management fee 1 2 GTAPX is a Long Short Equity option These funds investment strategy consists of minimizing overall market exposure while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline With annual returns of just 2 32 it s no surprise this fund has received Zacks Strong Sell ranking
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
Fidelity Growth Strategies Fund FDEGX Expense ratio 0 54 Management fee 0 38 FDEGX is an All Cap Growth mutual fund investing in a wide variety of equities no matter the size of the company and as long as the firm exhibits growth characteristics This fund has achieved five year annual returns of an astounding 10 1
Eagle Mid Cap Growth R5 HARSX Expense ratio 0 74 Management fee 0 52 HARSX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers HARSX has managed to produce a robust 11 78 over the last five years
JPMorgan NYSE JPM Small Cap Growth Fund A PGSGX has an expense ratio of 1 24 and management fee of 0 65 PGSGX is one of many Small Cap Growth mutual funds these funds tend to create their portfolios around stocks with market capitalization of less than 2 billion With annual returns of 12 36 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Is It Time To Buy Gold ETFs | Gold which is considered a great store of value and hedge against market turmoil lost its sheen in November on risk on trade In fact the yellow metal registered its worst month in three years losing 3 2 The optimism over the phase one trade deal between Beijing and Washington stronger than expected corporate earnings and a slew of economic data renewed confidence in the stock market and dampened the demand for safe haven The U S dollar also strengthened against a basket of currencies diminishing the yellow metal s attractiveness given that gold does not pay interest like fixed income assets read Further global demand is waning According to the World Gold Council gold demand rose just 3 during the third quarter as higher gold price took the sheen away from jewelry buying which shrank 16 Bar and coin demand also dropped by half In India gold demand is expected to hit a three year low in 2019 Additionally central bank buying fell 38 as the third quarter of 2018 had witnessed the highest amount of buying on record Gold ETFs also fell in tandem with gold price last month The SPDR Gold Trust P GLD ETF TSXV GLD iShares Gold Trust Physical Swiss Gold Shares ETF SPDR Gold MiniShares Trust TSXV GLD and GraniteShares Gold Trust TSX BAR are some of the popular ETFs All these funds have a Zacks ETF Rank 3 Hold Below we have discussed them in detail GLDThis is the largest and most popular ETF in the gold space with AUM of 42 billion and average daily volume of around 10 3 million shares The fund tracks the price of gold bullion measured in U S dollars and kept in London under the custody of HSBC Bank USA Expense ratio is 0 40 read IAUThis ETF offers exposure to the day to day movement of the price of gold bullion and is backed by physical gold under the custody of JP Morgan Chase NYSE JPM Bank in London It has AUM of 16 8 billion and trades in solid volume of 20 9 million shares a day on average The ETF charges 25 bps in annual fees SGOLThis product also tracks the price of gold bullion and is backed by physical bullion under the custody of JPMorgan Chase Bank It has amassed 1 1 billion in its asset base and trades in volume of 869 000 shares per day The product has an expense ratio of 0 17 GLDMThis product seeks to reflect the performance of the price of gold bullion Being one of the low cost products with expense ratio of 0 18 GLDM has amassed 1 1 billion in AUM and trades in solid average daily volume of 1 2 million shares BARWith AUM of 568 5 million and expense ratio of 0 17 the fund tracks the performance of gold price It trades in moderate volume of 182 000 shares per day on average see What Lies Ahead Despite the slide the precious metal has been up more than 13 so far this year due to tariff dispute The gains might continue as worries over possible delay in signing of U S China trade deal could bring back the lure for the yellow metal Additionally President Donald Trump recently tweeted that he would restore tariffs on steel and aluminum imports from Brazil and Argentina in retaliation to currency devaluations The Trump administration also proposed tariffs of up to 100 on 2 4 billion worth of French products including sparkling wine cheese and other goods to punish France for a new digital services tax that hits U S technology companies Further the central banks across the globe have been on a monetary easing policy spree that will boost demand for the yellow metal The Fed has slashed interest rates three times so far this year and the European Central Bank also cut interest rates in a package of easing measures read Moreover the economic picture still paints a bleak outlook This is especially true given the slew of downbeat data including contraction in the manufacturing sector for the fourth straight month in November and unexpected drop in U S construction spending in October The International Monetary Fund IMF last month cut its global growth forecast from 3 2 to 3 the lowest growth pace since the 2008 2009 financial crisis for this year citing increasing fallout from global trade friction Against this backdrop gold could prove to be a great store of value and hedge against market turmoil Given the solid mid term outlook but somewhat bearish near term sentiments investors may want to stay on the sidelines for the time being However risk tolerant long term investors may want to consider this recent slump a buying opportunity should they have the patience for extreme volatility Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
JPM | 3 Mutual Fund Misfires To Avoid December 04 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Franklin Real Return C FRRCX Expense ratio 1 28 Management fee 0 63 After expenses the 5 year return is 0 39 meaning your fees are far higher than the fund s returns
Hartford Global Real Asset R3 HRLRX HRLRX is a Global Equity mutual fund These funds invest in large markets like the U S Europe and Japan and operate with very few geographical limitations HRLRX offers an expense ratio of 1 5 and annual returns of 2 08 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
Causeway Global Absolute Return Investor CGAVX 1 55 expense ratio 1 1 management fee This fund has yielded yearly returns of 2 61 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
T Rowe Price Mid Cap Growth Adviser PAMCX Expense ratio 1 01 Management fee 0 61 PAMCX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers This fund has achieved five year annual returns of an astounding 12 87
JPMorgan NYSE JPM Large Cap Growth I SEEGX has an expense ratio of 0 68 and management fee of 0 45 SEEGX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With annual returns of 14 14 over the last five years this is a well diversified fund with a long track record of success
Neuberger Berman Real Estate Fund Trust NBRFX has an expense ratio of 1 04 and management fee of 1 2 NBRFX is a Sector Real Estate fund and these kinds of mutual funds typically invest in eeal estate investment trusts REITs due to their taxation rules With yearly returns of 10 76 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Gold To Shine In 2020 ETFs To Consider | Although gold lost it sheen with the start of the fourth quarter on renewed risk on sentiments the outlook seems bright heading into the New Year This is especially true given the looming uncertainty over the U S China trade deal and fresh tariff threats from Trump Notably the precious metal is up more than 13 so far this year We have highlighted some solid reasons why gold will remain strong next year Trade TariffWith no imminent phase one trade deal the prospect of the imposition of more tariff on Chinese goods from Dec 15 increases Additionally Trump is planning to restore tariffs on steel and aluminum imports from Brazil and Argentina in retaliation to currency devaluation The administration also proposed tariffs of up to 100 on 2 4 billion worth of French products including sparkling wine cheese and other goods to penalize France for a new digital services tax that has hit U S technology companies read The election in November Brexit issues and geopolitical tension will result in volatility in the stock market thereby leading to strong demand for the yellow metal Weak DataApart from trade tensions the latest data signals that U S economic growth is cooling down making investors jittery The Institute for Supply Management data showed that the U S manufacturing sector contracted for the fourth straight month in November as new factory orders dropped to their lowest level after 2012 Additionally U S construction spending fell unexpectedly in October as investment in private projects tumbled to its lowest level in three years The International Monetary Fund IMF recently cut its global growth forecast from 3 2 to 3 the lowest growth pace since the 2008 2009 financial crisis for this year citing an increasing fallout from global trade friction Against this backdrop gold is considered a great store of value and hedge against market turmoil read Easing PoliciesThe central banks across the globe have been on a monetary easing spree that is boosting demand for the yellow metal The Fed has slashed interest rates three times this year and the European Central Bank also cut interest rates in a package of easing measures Lower rates will continue to weigh on the dollar against the basket of currencies raising the metal s attractiveness as it does not pay interest like fixed income assets ETFs to ConsiderIn view of the reasons discussed above investors should buy gold at beaten down prices We highlight six popular gold ETFs that could be excellent plays for investors who believe that bullion will continue to move higher in 2020 All these funds have a Zacks ETF Rank 3 Hold SPDR Gold Trust P GLD ETF TSXV GLD This is the largest and most popular ETF in the gold space with AUM of 42 1 billion and average daily volume of around 10 2 million shares The fund tracks the price of gold bullion measured in U S dollars and kept in London under the custody of HSBC Bank USA Expense ratio comes in at 0 40 iShares Gold Trust This ETF offers exposure to the day to day movement of the price of gold bullion and is backed by physical gold under the custody of JP Morgan Chase NYSE JPM Bank in London It has AUM of 17 billion and trades in solid volume of 20 9 million shares a day on average The ETF charges 25 bps in annual fees read Aberdeen Standard Physical Swiss Gold Shares ETF This product also tracks the price of gold bullion and is backed by physical bullion under the custody of JPMorgan Chase Bank It has amassed 1 1 billion in its asset base and trades in a lower volume of 850 000 shares per day The product has an expense ratio of 0 17 SPDR Gold MiniShares Trust TSXV GLD This product seeks to reflect the performance of the price of gold bullion Being one of the low cost products with expense ratio of 0 18 GLDM has amassed 1 1 billion in AUM and trades in solid average daily volume of 1 2 million shares GraniteShares Gold Trust TSX BAR With AUM of 574 million and expense ratio of 0 17 the fund tracks the performance of gold price It trades in moderate volume of 182 000 shares per day on average see VanEck Merk Gold Trust This product seeks to provide investors with a convenient and cost efficient way to buy and hold gold through an exchange traded product with the option to take physical delivery of gold It charges 40 bps in fees per year and has AUM of 180 million OUNZ trades in average daily volume of 52 000 shares Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
JPM | Why These ETFs Under 20 Seem Solid Picks For 2020 | Most investors want to put their money in equities but may not be able to afford large stakes in valuable companies with higher priced stocks For them low priced stocks could be attractive as these will enable them to buy more shares instead of just a handful of higher priced shares for the same amount For example an investor willing to spend 10 000 can either purchase at least 500 shares of a stock trading under 20 or only 100 shares of a stock trading at 100 Additionally stocks under 20 reap huge profits as an increase of as less as a dollar in share price adds 5 to the portfolio This is in contrast to stocks priced at 100 or above which see 1 or lower gains if shares move up by 1 Further most of the low priced stocks have high levels of liquidity which give these stocks an added advantage This means that cash can be converted quickly and investors could easily get their money out of the securities In fact trading in higher average daily volumes keeps the bid ask spread tight and does not lead to extra cost for investors read And guess what the current market volatility has provided investors a great opportunity to tap some of these stocks The preference is not only limited to the stock world but can be felt in the ETF space as well In fact there are only a handful of ETFs that currently trade below 20 out of nearly 2 000 funds suggesting that choices are pretty worthy for investors who like to get a decent number of shares from their investment So let us dig into some of the ETFs that are below 20 and have AUM of over 50 million and average daily volume of at least 50 000 shares These low priced ETFs could lead to huge gains in the coming months ETFMG Prime Junior Silver ETF Silver will likely get a boost from the global woes including uncertainty over U S China trade deal and new tariff talks Brexit issues geopolitical tension and November election SILJ provides direct global exposure to small cap securities in the silver mining exploration and production industry by tracking the Prime Junior Silver Miners Explorers Index read Last Closing Price 11 20Zacks Rank NAAUM 118 2 millionExpense Ratio 0 69 Average Daily Volume in shares 346 000Global X Cloud Computing ETF Cloud computing is a fast emerging technology with many companies preferring to adopt it for cost cutting According to ResearchAndMarkets com the total cloud computing market size is expected to grow 18 1 from 271 96 billion in 2018 to 623 93 billion by 2023 In particular CLOU seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology including companies whose principal business is in offering computing Software as a Service SaaS Platform as a Service PaaS Infrastructure as a Service IaaS managed server storage space and data center real estate investment trusts and or cloud and edge computing infrastructure and hardware read Last Closing Price 15 59Zacks Rank NAAUM 460 6 millionExpense Ratio 0 68 Average Daily Volume in shares 258 000Global X SuperDividend ETF CN SDIV Investors will continue to hunt for juicy yields in 2020 given the continued uncertainty which will weigh on the equity markets This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis SDIV follows the Solactive Global SuperDividend Index and invests in 100 of the highest dividend yielding equity securities in the world Last Closing Price 17 03Zacks Rank 3 Hold AUM 923 6 millionExpense Ratio 0 08 Average Daily Volume in shares 351 000Invesco High Yield Equity Dividend Achievers ETF TSX PEY This fund offers exposure to stocks selected principally based on dividend yield and consistent growth in dividends It tracks the NASDAQ US Dividend Achievers 50 Index read Last Closing Price 18 37Zacks Rank 3AUM 915 4 millionExpense Ratio 0 53 Average Daily Volume in shares 147 000JPMorgan NYSE JPM Alerian MLP Index ETN Most MLPs are engaged in the processing and transportation of energy commodities such as natural gas crude oil and refined products As such they are not directly linked to the price of oil and are likely to be the major beneficiaries of an oil boom in the long term Acting as toll takers these MLPs earn revenues on volumes that flow through pipes and not on the commodity price This product offers exposure to midstream energy midstream Master Limited Partnerships MLPs by tracking the Alerian MLP Index Investors should note that it is currently trading near its 52 week low price Last Closing Price 19 84Zacks Rank NAAUM 2 3 billionExpense Ratio 0 85 Average Daily Volume in shares 1 6 millionBottom LineThe above mentioned ETFs should draw the attention of investors seeking to accumulate a larger number of low priced funds that are poised to outperform Even small investors could add a decent holding of some of these names with a modestly sized investment These products could fetch higher returns Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
MS | Asian Stocks Fall on Tuesday | Investing com Asian stocks took a cue from the major indices in the U S and turned negative on Tuesday morning although the losses in Asia were generally subdued
Overnight Monday shares plunged in U S markets giving up early gains with markets reacting to the lack of details around any potential trade deal between the U S and China and the potential of any deal having limited impact on global growth
Chinese shares took a breather on Tuesday morning
The Shanghai Composite Index was down 0 36 by 9 25 AM ET 2 25 AM GMT while the Shenzhen Component offered an exception to the downbeat performances by rising 0 53 Chinese shares have enjoyed significant gains this year The Shanghai Composite is up around 18 from the beginning of 2019 and Shenzhen is up about 25
In Hong Kong Tuesday morning the Hang Seng Index was down 0 55 at mid morning to 28 797
Most other major stock markets around the region were also in the red
Japan s Nikkei 225 was down 0 62 to 21 676 and the Kospi in Korea was trading down 0 71 to 2 175 In Australia the S P ASX 200 was down 0 37 to 6 196
The losses on Tuesday marked a significant turn around in the mood of investors who on Monday had powered indexes to substantial gains on expectations of a quick trade deal between China and the U S While those expectations remain few details of any agreement have come to light
At the same time China s National People s Congress opened its annual meeting on Tuesday Policy makers have lowered the target for economic growth in the country to between 6 and 6 5 for this year The target band rather than a specific target gives regulators more room to maneuver
It s good news for the market in the short term bad news for China is the medium term as more leverage will need to be piled up Alicia Garcia Herrero chief Asia Pacific economist at Natixis SA told Bloomberg
Regulators also announced cuts to the value added tax VAT including a 3 to the top bracket in a move that could help support manufacturing The tax could add up to as much as CNY800 billion according to figures from Morgan Stanley NYSE MS quoted by Bloomberg |
MS | China Aims GDP Growth at 6 to 6 5 | Investing com China plans to lower its GDP growth target to a range of between 6 to 6 5 Premier Li Keqiang said in his annual work report delivered early into the annual meeting of the National People s Congress that started Tuesday morning
The lower end of the growth target would represent the slowest pace of economic growth in nearly three decades according to Bloomberg Unlike other years authorities in Beijing are giving themselves a band for the growth target as opposed to a specific number which could give them more flexibility
Chinese authorities also announced tax breaks on Tuesday morning most notably a 3 cut to the top bracket of the value added tax VAT in order to support the manufacturing sector
According to Morgan Stanley NYSE MS the 3 percentage point cut to VAT could translate into CNY600 billion 90 billion or 0 6 of GDP Bloomberg reported
Other target economic figures for 2019 announced by Beijing include consumer price index CPI growth of 3 and a budget deficit of 2 8 of GDP |
MS | Chinese Markets Bounce Back From Morning Losses | Investing com Asian stocks recouped some losses through the morning session Tuesday with several trading in positive territory by early afternoon although gains were subdued
After solid gains on Monday most bourses across Asia opened the day in the red Overnight Monday shares plunged in U S markets giving up early gains and closing in the red after concerns arose about the lack of details around any potential trade deal between the U S and China and how it would affect global growth
Asian shares followed U S shares down in the morning session but recouped some losses Chinese shares in particular made some gains
The Shanghai Composite Index was up 0 24 by 1 13 AM ET 6 13 AM GMT while the Shenzhen Component build on morning gains and was up 1 15 early into the afternoon session Chinese shares have enjoyed significant gains this year The Shanghai Composite is up around 18 from the beginning of 2019 and Shenzhen is up about 25
In Hong Kong the Hang Seng Index recouped some morning losses and moved between mild gains and mild losses It was down just 0 04 by 1 15 AM ET 6 16 AM GMT
Most other major stock markets around the region remained in the red in the afternoon
Japan s Nikkei 225 was down 0 53 to 21 705 and the Kospi in Korea was trading down 0 70 to 2 175 In Australia the S P ASX 200 was down 0 29 to 6 199
The gains in China followed comments in the morning at the opening of the annual meeting of the National People s Congress In his work report Premier Li Keqiang announced a target for economic growth to between 6 and 6 5 for 2019
Regulators also announced cuts to the value added tax VAT including a 3 to the top bracket in a move that could help support manufacturing The tax could add up to as much as CNY800 billion according to figures from Morgan Stanley NYSE MS quoted by Bloomberg |
MS | Luck Humility and Success | Rick Bensignor CEO and founder of the Bensignor Group and former Chief Market Strategist at Morgan Stanley NYSE MS makes his first appearance on Mental Game of Trading He sheds light on his background and reveals a crucial trading lesson he learned during the mini crash 30 years ago |
MS | China Sees Tough Battle in Boosting Growth Without Debt Blowout | Bloomberg China needs to brace for a tough economic battle ahead in the words of its premier
It s a struggle on two main fronts there s U S President Donald Trump and his demands to cut away support for state firms or face lingering tariffs while at home there s the tussle to help struggling private firms without ramping up debt to even more unsustainable levels
The plan to navigate those challenges was laid out Tuesday in the government s annual policy report with Premier Li Keqiang giving himself and President Xi Jinping some wriggle room by lowering the economic growth target for 2019 to a range of 6 to 6 5 percent down from about 6 5 percent last year
The acceptance of the economy s inexorable slowdown the lower bound of the new target would be the slowest expansion in almost three decades was largely cheered by economists who warn anything faster would need excessive stimulus and erode long term financial stability
There was another encouraging change too In days gone by policymakers would have responded to the confluence of challenges seen now with an all out spending binge on roads rail and whatever else could keep growth humming above 10 percent Not today While there ll still be plenty of highway and fast train projects there s also a push to cut taxes a move that gives the private sector more breathing room even if it s a slower boost to growth
In all Li rolled out tax cuts worth almost 2 trillion yuan 298 billion and pledged further stimulus ahead While that emphasis on stronger fiscal policy can be seen as a loosening from last year s vow to curb financial risks and trim the budget the overall goal is still to buffer the economy without letting debt accelerate once more That s a balancing act that will be severely tested should any new threats to growth appear
It s a big fiscal push said Michael Spencer global head of economics at Deutsche Bank AG DE DBKGn in Hong Kong There s a reluctance to just turn on the infrastructure tap if they don t need to
Li warned that China faces a graver and more complicated environment this year He s trying to rekindle lending to the private sector mindful that the total debt pile is approaching 300 percent of GDP China must be fully prepared for a tough struggle he said
That struggle isn t only a domestic affair With Europe s growth engine sputtering and the longevity of the U S expansion under question a more severe Chinese downturn would be bad news for the global economy and spell trouble for the Asian nations that are integrated into its supply chain
For now policy makers are focused on managing the nation s long deceleration from the double digit growth rates of the early 2000s Economists surveyed by Bloomberg see output growth slowing to 6 2 percent this year from 6 6 percent in 2018 before easing further in 2020 and 2021
A cut of 3 percentage points to the top bracket of value added tax was announced in a move aimed at benefiting the manufacturing sector a plan reported by Bloomberg News on Monday In addition a 1 percentage point cut to the 10 percent VAT bracket was announced Combined the VAT cuts are equivalent to as much as 800 billion yuan and will boost corporate earnings according to Morgan Stanley NYSE MS
The target budget deficit for 2019 was set at 2 8 percent of GDP versus last year s goal of 2 6 percent The report pledged a noticeable decrease in the tax burdens of major industries
Despite the tax cuts Li s report pledged to keep China s leverage ratio basically stable in 2019 That may be a difficult feat The message from the gathering is that shoring up growth is the new normal and that deleveraging is definitely out said Pauline Loong managing director at research firm Asia Analytica in Hong Kong
Indeed from bank loans to trust product issuance to margin trading accounts at stock brokerages leverage in China is rising nearly everywhere it can Bank loans jumped by a record amount in January and off balance sheet financing rose for the first time in 11 months The premier himself has warned of a too rapid increase in short term funding
Unlike in previous years there were no targets for retail sales growth or fixed asset investment The reports reiterated that monetary policy will remain prudent while fiscal policy will be proactive stronger and more effective Further cuts to the required reserves ratio for smaller banks are planned Li said
The U S and China are close to a trade deal that could lift most or all U S tariffs as long as Beijing follows through on pledges ranging from better protecting intellectual property rights to buying a significant amount of American products That would remove one cloud hanging over the economy leaving Xi with a lesser need to use stimulus to support growth
Setting the growth target at 6 6 5 percent range suggests the government does not want to have a large stimulus repeated even with significant uncertainty of external shock arising from the U S tariffs said Liu Ligang chief China economist at Citigroup Inc NYSE C in Hong Kong |
MS | Time to Buy Saudi Stocks Some Investors Eye Dubai Instead | Bloomberg Saudi Arabian stocks are about to join major emerging markets benchmarks gaining the attention of many money managers for the first time But some investors familiar with markets in the Gulf say that Dubai offers bigger potential gains
That s because the biggest stocks in Riyadh have been rallying in anticipation of their inclusion in the gauges compiled by FTSE Russell and MSCI Inc in several tranches starting this month Dubai s market on the other hand has been battered in the past year by concerns mostly tied to its real estate market a pillar of its economy
Saudi shares have historically traded at a premium to Dubai s in terms of estimated price to earnings But the gap between them reached the widest since 2010 in February The Dubai Financial Market General Index was the worst performer globally last year among major gauges tracked by Bloomberg while the Saudi peer was among the 10 best Dubai s main index lost 0 3 percent on Tuesday while the gauge in Saudi Arabia fell less than 0 1 percent
We think the U A E has reached the bottom of its real estate cycle said James Johnstone the London based co head of emerging and frontier markets at RWC Partners LLC which oversees 15 billion We have been using that opportunity to reduce some of our Saudi holdings and reallocate it back into the U A E property stocks that are very cheap and attractively priced
More from RWC s Johnstone
We still like Saudi Arabia but we think valuations are not cheap and some of the stocks reached full price We saw a big rally in banks and petrochemicals
He holds Emaar Development PJSC which has strong double digit cash flow yield
Dubai is in a very interesting part of the world in terms of being a hub for the companies continuing their expansion into the Middle Eastern and African markets
Considers that the story of Dubai both as a hub for businesses and a tourist destination looks to be very strong expects property stocks to generate around 14 percent dividend yields this year
Read more Dubai Property Giant s Fabulous February Triggers Sentiment Test
Thea Jamison a portfolio manager at Change Global Investment LLC
Saudi Arabia s stock market is expensive she said adding that fundamentals including return on equity and operating margin are not attractive versus Dubai
The reason for the Saudi premium is investor optimism on inflows due to the MSCI inclusion we have a more cautious stance
When I visited Saudi Arabia several months ago I gathered the economy was under pressure Oil revenues are subdued limiting government spending The private sector is tackling the structural labor issues
Adds that plans by the government to open up the economy will bring more competition and further pressure profitability for Saudi companies
Morgan Stanley NYSE MS analysts Marina Zavolock Regiane Yamanari and Katherine Carpenter
They recommended a double upgrade on U A E equities to overweight in a report in February citing signs of potential potential fundamental improvement in the property sector and continued strength in financials
Analysts estimate that global emerging markets funds have a neutral position on the U A E but we think that as Saudi s MSCI EM inclusion approaches U A E may shift from a funding source to a cheaper alternative for investors wishing to cover significant Middle East and North Africa equities underweights
They cited that Emaar Properties PJSC fourth quarter results were meaningfully better than expected driven by a big beat at Emaar Development an early sign of potential fundamental improvement
Updates stock performance in third paragrah |
MS | Exclusive Rosneft opens trading arm in Singapore as part of Asian pivot | By Olga Yagova and Dmitry Zhdannikov MOSCOW LONDON Reuters Rosneft is opening a trading arm in Singapore as part of a pivot to Asia the world s biggest and fastest growing energy consuming region where the Russian state oil major plans to manage new projects and boost oil sales Six sources familiar with Rosneft s strategy told Reuters the arm Rosneft Singapore had been registered at the end of 2018 and that several employees would relocate from Moscow during the spring and summer of 2019 The office will likely be run by Andrey Bogatenkov currently the first deputy head of crude and product exports for Rosneft in Moscow three of the six sources said The fact that Rosneft plans to appoint a key crude and products trader as the head of its Singapore branch means it is really betting big on the region a trader at a Western oil major working on the Russian crude oil market said Rosneft said it was not immediately able to comment Russia s coveting of the eastern oil market dates to the middle of the last decade Back then Russia the world s second largest oil exporter after Saudi Arabia was shipping most of its oil to Europe Rosneft and pipeline monopoly Transneft borrowed tens of billions of dollars from China to construct the first direct pipeline to the country and later expanded it to add a major export terminal on the Pacific Kozmino The shift toward consumers such as China and India accelerated in recent years as Asia showed steady import growth and Russia came under Western sanctions over its actions in Ukraine The sanctions complicated Western lending to Moscow forcing Rosneft to borrow more from Asian energy consumers The share of Russian crude exports heading east rose to 36 percent in 2018 from 31 percent in 2017 according to the Oxford Institute of Energy Studies Rosneft is run by a close ally of President Vladimir Putin Igor Sechin who pledged in 2017 to open offices in Singapore and has significantly boosted the company s presence in Asia Rosneft s crude oil exports to Asia Pacific markets reached 51 million tonnes or 1 million barrels per day in 2018 about half of the producer s foreign sales the Russian Energy Ministry says In 2017 Rosneft signed a long term supply deal with China s CEFC and increased supplies to the country under a new inter government agreement TRADING AMBITIONS Rosneft had long planned to buy a major oil trading division to compete with companies such as BP LON BP and Shell LON RDSa At some point it agreed to purchase the oil trading unit of U S bank Morgan Stanley NYSE MS but the deal was derailed by sanctions The company subsequently developed a Swiss trading arm Rosneft Trading which focuses mostly on supplying Rosneft s refineries in Germany Rosneft also formed a broad alliance with Swiss commodities firm Trafigura to further boost its trading activity The two firms co own a refinery in India and Trafigura has been selling a significant share of Rosneft s oil on global markets The opening of the Rosneft branch in Singapore represents another attempt to further boost trading
Rosneft wants to claw back some volumes and deal directly with many customers in Asia a source familiar with Rosneft s strategy said |
JPM | Saudi U A E Banks to See Jump in Loan Demand as Profit Lags | Bloomberg While banks in Saudi Arabia and the United Arab Emirates can look forward to burgeoning loan growth in 2020 higher earnings could be slow to follow as lower interest rates pressure profit margins
Lending in the U A E is expected to get a lift from Dubai s hosting of a six month exhibition involving more than 190 countries In addition economic growth is forecast to rise to 2 5 from 1 6 last year according to estimates compiled by Bloomberg A regional expansion by U A E banks may also add to revenue as a government backed mortgages program in Saudi Arabia fuels demand for home loans
Expo 2020 is a key catalyst which can offer a boost to both corporate and consumer spending and provide impetus to tourism JPMorgan Chase NYSE JPM Co analyst Naresh Bilandani said in an email We re seeing an improvement in credit volumes in Saudi Arabia a recovery in loan growth in Turkey in the fourth quarter of 2019 and strong volume in Egypt These trends will also be supportive of U A E banks loan growth in 2020
The outlook for profit is less certain as rate cuts by the Federal Reserve reduce the banks income from charges on loans Central banks in the Gulf tend to move in lockstep with the Fed to protect their currencies peg to the dollar Non performing loans in the U A E jumped to their highest level in more than five years in 2019 amid a slump in property prices
The oversupply in the U A E property market could continue to offer downside risk to our impairment charge expectations for 2020 Bilandani said Rising geopolitical risk in the Middle East North Africa region could also offer negative surprises to the cost of risk
Average credit growth at the top U A E lenders may accelerate by 5 6 this year from 4 in 2019 he said
Saudi Mortgages
In neighboring Saudi Arabia loans may increase by an average of 7 compared with about 6 in 2019 Bilandani said
Saudi retail mortgages will continue to remain a key driver of credit after expanding 31 year on year during the third quarter compared with total loans growth of 4 he said
The kingdom in 2018 started a loan guarantee program to improve access to housing financing and support down payments as part of Crown Prince Mohammed bin Salman s plan to diversify the economy and reduce its dependence on oil
Corporate volumes are also starting to show some pick up Bilandani said
Net income growth at the biggest Saudi banks could slow to about 4 in 2020 compared with 14 last year as the costs of holding deposits outpace deposit growth Bilandani said
What Bloomberg Intelligence Says
The outlook for Gulf banks is supported by government infrastructure investment MSCI index inclusion and M A activity though slower reform and oil prices are potential risks
Property and debt cast a shadow on U A E valuations but transformation via M A and digital will be key to their prospects after 2020 21
Edmond Christou analyst financials
Click here to read the research
Saudi banks will be looking to the nation s sovereign wealth fund to help fuel lending as the government reduces expenditure said Aarthi Chandrasekaran a portfolio manager at Shuaa Capital And while lower net interest margins will filter through this year to banks in the region lower interest rates are positive for lending growth and credit quality of the banking sector she said
Mega projects in Saudi Arabia during the second half of the year will also boost lending Arqaam Capital Ltd analysts led by Jaap Meijer said in a note While the outlook for banks in the Gulf Cooperation Council will be challenging in 2020 indications that the Fed will hold interest rates means the medium term outlook has notably brightened |
JPM | Europe Open DAX Set To Underperform U S Bank Earnings Eyed | By Peter Nurse
Investing com European stock markets are expected to open marginally lower Tuesday as investors take a cautious view ahead of the start of the earnings season
Futures for the U K s FTSE 100 index were trading 2 points or 0 1 lower by 02 20 ET 07 20 GMT futures for France s CAC 40 were 1 point or 0 1 lower while the Dax futures contract underperformed trading down 24 points or 0 2
European earnings results will begin in earnest next week but there are a number of U S reports due this week starting today with banking giants JPMorgan Chase NYSE JPM Citigroup NYSE C and Wells Fargo NYSE WFC The banks are often taken as a rough proxy for the health of the broader economy and are thus likely to set the tone of the overall earnings season
Sentiment received another boost overnight as the U S revoked its decision taken last summer amid tensions between the two economic superpowers to call China a currency manipulator just days before the two countries are set to sign phase one of a trade deal
The news helped raised optimism ahead of the U S and China signing the first phase of their trade deal on Wednesday This phase one deal would prevent any further tit for tat tariffs and roll back some existing U S tariffs in Chinese goods
Elsewhere crude oil was largely unchanged as investors kept a wary eye on tensions in the Middle East as well as the potential trade deal between China and the U S However gold futures lost ground as investors left the safe haven amid positive signs on the trade deal
U S Crude Oil WTI Futures traded flat at 58 00 by 2 15 AM ET 07 15 GMT International Brent Oil Futures also rose 0 1 to 64 25 Gold futures for February delivery on New York s COMEX fell 0 6 to 1 542 05 |
JPM | European Stocks Drop at Open U S Banks Earnings Eyed | By Peter Nurse
Investing com European stock markets pushed lower Tuesday as investors took a cautious view ahead of the start of the earnings season
At 03 35 ET 08 35 GMT the U K s FTSE index was trading 21 points or 0 3 lower France s CAC 40 was 49 points or 0 8 lower while the DAX dropped 62 points or 0 5 The pan Europe Euro Stoxx 50 index fell 30 points 0 8
European earnings results will begin in earnest next week but there are a number of U S reports due this week starting today with banking giants JPMorgan Chase NYSE JPM NYSE JPM Citigroup NYSE C NYSE C and Wells Fargo NYSE WFC NYSE WFC The banks are often taken as a rough proxy for the health of the broader economy and are thus likely to set the tone of the overall earnings season
There was limited impact from news that China s dollar denominated exports and imports were both sharply higher than expected in December Exports rose 7 6 on year against a 1 3 drop in November while imports were 16 3 higher than a year ago Reuters reported citing data from the Chinese customs authority Chinese export growth still hit a three year low last year overall as trade suffered from the expansion of U S import tariffs
Strong import data from China tend to be positive news for European stock markets as the EU is China s largest trading partner Most of this trade is in industrial and manufactured goods
Additionally sentiment had received another boost overnight as the U S revoked its decision taken last summer amid tensions between the two economic superpowers to call China a currency manipulator just days before the two countries are set to sign phase one of a trade deal
The news helped raised optimism ahead of the U S and China signing the first phase of their trade deal on Wednesday This phase one deal would prevent any further tit for tat tariffs and roll back some existing U S tariffs in Chinese goods
Elsewhere crude oil edged lower as investors kept a wary eye on tensions in the Middle East However gold futures lost ground as investors left the safe haven amid positive signs on the trade deal
U S Crude Oil WTI Futures traded down 0 4 at 57 87 by 3 35 AM ET 08 35 GMT International Brent Oil Futures also fell 0 3 to 64 03 Gold futures for February delivery on New York s COMEX fell 0 3 to 1 545 75 |
MS | Morgan Stanley MS Sees Hammer Chart Pattern Time To Buy | Morgan Stanley NYSE MS has been struggling lately but the selling pressure may be coming to an end soon That is because MS recently saw a Hammer Chart Pattern which can signal that the stock is nearing a bottom What is a Hammer Chart Pattern A hammer chart pattern is a popular technical indicator that is used in candlestick charting The hammer appears when a stock tumbles during the day but then finds strength at some point in the session to close near or above its opening price This forms a candlestick that resembles a hammer and it can suggest that the market has found a low point in the stock and that better days are ahead Other FactorsPlus earnings estimates have been rising for this company even despite the sluggish trading lately In just the past 60 days alone 6 estimates have gone higher compared to none lower while the consensus estimate has also moved in the right direction Estimates have actually risen so much that the stock now has a Zacks Rank 2 Buy suggesting this relatively unloved stock could be due for a breakout soon This will be especially true if MS stock can build momentum from here and find a way to continue higher of off this encouraging trading development You can see Today s Stocks from Zacks Hottest Strategies It s hard to believe even for us at Zacks But while the market gained 21 9 in 2017 our top stock picking screens have returned 115 0 109 3 104 9 98 6 and 67 1 And this outperformance has not just been a recent phenomenon Over the years it has been remarkably consistent From 2000 2017 the composite yearly average gain for these strategies has beaten the market more than 19X over Maybe even more remarkable is the fact that we re willing to share their latest stocks with you without cost or obligation |
MS | Carbon Black Gearing Up For Blockbuster IPO | Tech savvy investors will be jumping with joy after learning that Carbon Black the Waltham based cybersecurity company that was previously known as Bit9 Inc is gearing up for a blockbuster IPO that could reap in more than 150 million for the company Executives are expecting big things during the company s IPO and have recently upped the price range for their initial debut in a sign of what could be one of the most lucrative tech IPOs in a booming market year
These are the key details behind Carbon Black s forthcoming IPO and what investors hungry for a slice of the cybersecurity market will want to brief themselves on before making their purchasing decisions
Tech IPOs are booming
Investors will doubtlessly find themselves salivating over the prospect of Carbon Black s NASDAQ CBLK market debut and for good reasons tech IPOs have had an astonishingly successful year and despite major media scandals surrounding established tech behemoths like Facebook NASDAQ FB tech focused companies appear to be on a hot streak that s unlikely to end anytime soon The fact that tech IPOs have been above and beyond expectations recently will thus translate into positive headwinds sure to buoy Carbon Black s initial debut
Before investors throw their weight behind Carbon Black entirely however they ll want to take a peak under the hood to see how the company s internal finances are looking There Carbon Black s executives may have some explaining to do given that the company has been posting net losses consistently since its inception Like most fledgling tech companies however Carbon Black has a myriad of good reasons to be in the red namely that it s investing heavily in its own platform to meet the astonishing demand for its services that s sure to keep growing in the future
While the company s notes that it accrued net losses of 44 6 million in 2016 and 55 8 million in 2017 for instance it makes it clear the global market for cybersecurity companies is growing at a staggering pace that demands continued investments in the company s own platform A Morgan Stanley NYSE MS blue paper posits that the cybersecurity market could by more than four times overall IT spending As long as companies and individuals across the market keep dumping obscene amounts of cash into their cybersecurity initiatives then companies like Carbon Black can expect to face huge demands for their services
The fact that Carbon Black s executives have decided to boost the initial range of their offering from 15 to 17 per share to 17 to 19 per share too should indicate to investors that the company s eyes are set on profitability If investors buy Carbon Black s shares at the high end of their expected range the company s IPO could net in as much as 152 million for the cybersecurity firm and would peg its overall market valuation roughly at the 1 2 billion mark With an influx of cash like that Carbon Black may get all the funding it needs to finish investing in its own platform so that it can charge head first towards the competition
Carbon Black s revenue is up
Net losses aren t the only thing investors will be paying attention to in the company s prospectus either there s some good news too namely the fact that the company s revenue streams have been growing rather impressively as of late It has been adopted by many thriving tech companies Carbon Black s revenue streams rapidly soared from 70 6 million in 2015 to 162 million in 2017 for instance a 51 compound annual growth rate over a two year period that will have the eyes of some investors bursting from their heads If the company can keep its revenue soaring upwards like that expect its current net loss woes to be a thing of the past sooner rather than later
The Massachusetts based cybersecurity company will be the first from its state to go public this year and the 8 million shares it intends to offer up to the public will doubtlessly be gobbled up in a quick fashion Carbon Black is investing heavily in cloud based cybersecurity initiatives assuming that future IT growth will largely be based around the cloud and will thus catch the eye of tech savvy investors who are looking for cutting edge companies focused more on tomorrow s market than today s Carbon Black will be using the majority of the funds it gleams from its IPO to invest more in its sales and marketing teams too which will please non tech savvy investors hungry for higher revenue streams With the company having more than doubled its customer base in a measly two years it stands to reason that Carbon Black s current strategy is paying off and that its IPO will only fuel its dizzying ascent to the height of the market Tech investors will want to keep their eyes peeled during Carbon Black s IPO the market debut will doubtlessly be one of the biggest for the year and could upend the existing cybersecurity market |
JPM | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires November 27 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
IVA Worldwide Fund C IVWCX 2 01 expense ratio and 0 9 management fee IVWCX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With a five year after expenses return of 1 96 you re mostly paying more in fees than returns
Auer Growth Fund AUERX Expense ratio 2 31 Management fee 0 9 Over the last 5 years this fund has generated annual returns of 1 56
Catalyst Small Cap Insider Buy I CTVIX This fund has an expense ratio of 1 52 and management fee of 1 25 CTVIX is an All Cap Value mutual fund which invests in small medium and large cap companies though they end up focusing on bigger firms due to percentage of assets With an annual average return of 3 99 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Hirtle Callaghan Institutional Growth Equity HCS HCIGX 0 23 expense ratio and 0 17 management fee HCIGX is an All Cap Growth mutual fund investing in a wide variety of equities no matter the size of the company and as long as the firm exhibits growth characteristics With an annual return of 13 02 over the last five years this fund is a winner
JPMorgan NYSE JPM Intrepid Growth Fund R2 JIGZX has an expense ratio of 1 09 and management fee of 0 3 JIGZX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks Thanks to yearly returns of 10 68 over the last five years JIGZX is an effectively diversified fund with a long reputation of solidly positive performance
VALIC Company II Socially Responsible Fund VCSRX Expense ratio 0 56 Management fee 0 25 VCSRX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset VCSRX has produced a 10 44 over the last five years
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires November 28 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Oppenheimer SteelPath MLP Alpha C MLPGX 2 29 expense ratio and 1 1 management fee MLPGX is classified as a Sector Energy mutual fund Throughout the massive global energy sector these funds hold a wide range of quickly changing and vitally important industries With a five year after costs return of 8 06 you re for the most part paying more in charges than returns
Lord Abbett Inflation Focused R2 LIFQX 1 08 expense ratio 0 3 management fee LIFQX is classified as a Government Bonds fund These funds hold securities issued by the U S federal government in their portfolios and focus across the curve meaning the yields and interest rate sensitivity will vary This fund has an annual returns of 0 57 over the last five years Another fund guilty of having investors pay more in fees than returns
JPMorgan NYSE JPM International Value L JNUSX This fund has an expense ratio of 0 66 and management fee of 0 6 JNUSX is a part of the Non US Equity fund category many of which will focus across all cap levels and will typically allocate their investments between emerging and developed markets With an annual average return of 0 85 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
Virtus KAR Small Cap Core I PKSFX 1 02 expense ratio and 0 75 management fee PKSFX is a Small Cap Blend mutual fund that usually targets companies with a market capitalization of less than 2 billion With an annual return of 17 9 over the last five years this fund is a winner
MFS Mass Investors Growth Stock C MIGDX is a stand out fund MIGDX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With five year annualized performance of 12 76 and expense ratio of 1 48 this diversified fund is an attractive buy with a strong history of performance
Columbia Select Large Cap Equity Fund Z NSEPX has an expense ratio of 0 55 and management fee of 0 76 NSEPX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With annual returns of 10 54 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio November 29 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
JPMorgan NYSE JPM Research Market Neutral C JMNCX This fund has an expense ratio of 4 15 and a management fee of 0 8 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest JMNCX is a Market Neutral Equity mutual fund These portfolios usually hold 50 of their securities in a long position as well as 50 in a short position The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
AB Allocation Market Real Return C ACMTX Expense ratio 2 01 Management fee 0 8 Over the last 5 years this fund has generated annual returns of 3 4
Third Avenue Real Estate Value Investor TVRVX 1 4 expense ratio 0 9 management fee This fund has yielded yearly returns of 1 08 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
Laudus US Large Cap Growth LGILX 0 75 expense ratio and 0 63 management fee LGILX is a Large Cap Growth mutual fund and these funds invest in many large U S firms that are projected to grow at a faster rate than their large cap peers With an annual return of 13 28 over the last five years this fund is a winner
Janus Henderson US Managed Volatilty T JRSTX has an expense ratio of 0 8 and management fee of 0 5 JRSTX is classified as a Large Cap Blend fund More often than not Large Cap Blend mutual funds invest in companies with a market cap of over 10 billion Buying stakes in bigger companies offer these funds more stability and are well suited for investors with a buy and hold mindset Thanks to yearly returns of 10 16 over the last five years JRSTX is an effectively diversified fund with a long reputation of solidly positive performance
Principal Small Cap Growth I Institutional PGRTX has an expense ratio of 1 02 and management fee of 1 08 PGRTX is a Small Cap Growth mutual fund and tends to feature small companies in up and coming industries and markets With yearly returns of 11 37 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires November 29 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Janus Henderson Short Term Bond C JSHCX This fund has an expense ratio of 1 49 and a management fee of 0 44 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest JSHCX is an Investment Grade Bond Short option these funds focus on the short end of the curve generally with bonds that mature in less than two years The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
JPMorgan NYSE JPM International Value Fund R6 JNVMX 0 55 expense ratio 0 6 JNVMX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too This fund has yearly returns of 0 23 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Templeton Global Total Return A TGTRX This fund has an expense ratio of 0 97 and management fee of 0 61 TGTRX is classified as a Diversified Bonds fund which offers exposure to a wide variety of fixed income types stretching across various issuers credit levels and maturities With an annual average return of 0 43 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
William Blair Large Cap Growth N LCGNX is a fund that has an expense ratio of 1 and a management fee of 0 6 LCGNX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With yearly returns of 14 83 over the last five years this fund clearly wins
Principal Capital Appreciation R3 PCAOX has an expense ratio of 1 06 and management fee of 0 47 PCAOX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With annual returns of 10 55 over the last five years this is a well diversified fund with a long track record of success
TIAA CREF Real Estate Security Premier TRRPX has an expense ratio of 0 66 and management fee of 0 48 TRRPX is categorized as a Sector Real Estate mutual fund which typically invests in various real estate investment trusts REIT due to their taxation rules With yearly returns of 11 68 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Are You Invested In These 3 Mutual Fund Misfires November 29 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Legg Mason BW Absolute Return Opportunity R LBARX This fund has an expense ratio of 1 45 and a management fee of 0 64 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest LBARX is an Investment Grade Bond Intermediate fund which targets bonds that mature in more than three years but less than 15 years and are a middle of the curve option for investors The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Intrepid Endurance Fund Investor ICMAX 1 36 expense ratio 1 ICMAX is a Small Cap Value mutual fund option which typically invest in companies with market caps under 2 billion This fund has yearly returns of 0 18 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Highland Energy MLP Fund Y HEFYX This fund has an expense ratio of 0 01 and management fee of 1 HEFYX is classified as a Sector Energy mutual fund Throughout the massive global energy sector these funds hold a wide range of quickly changing and vitally important industries With an annual average return of 18 09 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
JPMorgan NYSE JPM Large Cap Growth R2 JLGZX is a fund that has an expense ratio of 1 18 and a management fee of 0 45 JLGZX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With yearly returns of 12 48 over the last five years this fund clearly wins
Neuberger Berman Real Estate Fund I NBRIX has an expense ratio of 0 85 and management fee of 0 95 NBRIX is categorized as a Sector Real Estate mutual fund which typically invests in various real estate investment trusts REIT due to their taxation rules With annual returns of 10 96 over the last five years this is a well diversified fund with a long track record of success
Brown Advisory Flexible Equity Investor BIAFX has an expense ratio of 0 72 and management fee of 0 44 BIAFX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With yearly returns of 10 38 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Mutual Fund Misfires Of The Market November 29 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Leader Short Term Bond Fund Institutional LCCIX This fund has an expense ratio of 1 16 and a management fee of 0 75 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest LCCIX is an Investment Grade Bond Short fund By investing in bonds that mature in less than two years Investment Grade Bond Short funds are focused on the short end of the curve The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
PIMCO Unconstrained Bond C PUBCX 1 95 expense ratio 0 95 management fee PUBCX is classified as a Diversified Bonds fund which offers exposure to a wide variety of fixed income types stretching across various issuers credit levels and maturities This fund has an annual returns of 1 62 over the last five years Another fund guilty of having investors pay more in fees than returns
AB Allocation Market Real Return A AMTAX This fund has an expense ratio of 1 26 and management fee of 0 75 AMTAX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With an annual average return of 3 49 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
JPMorgan NYSE JPM Large Cap Growth R5 JLGRX Expense ratio 0 53 Management fee 0 45 JLGRX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks This fund has achieved five year annual returns of an astounding 13 19
Principal Capital Appreciation R5 PCAQX has an expense ratio of 0 75 and management fee of 0 47 PCAQX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset Thanks to yearly returns of 10 9 over the last five years PCAQX is an effectively diversified fund with a long reputation of solidly positive performance
Neuberger Berman Mid Cap Growth R3 NMGRX Expense ratio 1 35 Management fee 0 76 NMGRX is a Mid Cap Growth mutual fund These funds aim to target companies with a market capitalization between 2 billion and 10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers NMGRX has produced a 10 44 over the last five years
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Avoid These 3 Mutual Fund Misfires December 02 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Ivy Cundill Global Value R IYCUX This fund has an expense ratio of 1 69 and a management fee of 1 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest IYCUX is a Global Equity mutual fund investing in bigger markets like the U S Europe and Japan these kinds of funds aren t limited by geography The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Touchstone Ultra Short Duration Fixed Income A TSDAX 0 69 expense ratio 0 25 management fee TSDAX is part of the Government Bond Short fund category Often seen as risk free assets these funds hold securities issued by the U S federal government and they focus on the short end of the curve This fund has an annual returns of 0 65 over the last five years Another fund guilty of having investors pay more in fees than returns
Sierra Core Retirement C SIRCX 2 48 expense ratio 1 25 management fee This fund has yielded yearly returns of 1 31 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Janus Henderson Enterprise N JDMNX 0 66 expense ratio and 0 64 management fee JDMNX is a Mid Cap Growth mutual fund These funds aim to target companies with a market capitalization between 2 billion and 10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers With an annual return of 14 98 over the last five years this fund is a winner
AQR Large Cap Defensive Style N AUENX has an expense ratio of 0 65 and management fee of 0 25 AUENX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With annual returns of 13 62 over the last five years this is a well diversified fund with a long track record of success
JPMorgan NYSE JPM Small Cap Growth Fund R6 JGSMX has an expense ratio of 0 74 and management fee of 0 65 JGSMX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under 2 billion and large growth opportunities With yearly returns of 14 09 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio December 02 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
JPMorgan NYSE JPM Research Market Neutral I JMNSX 3 39 expense ratio and 0 8 management fee JMNSX is a Market Neutral Equity mutual fund These funds attempt to maximize returns and usually hold 50 of their securities in a long position and 50 in a short position With a five year after costs return of 0 48 you re for the most part paying more in charges than returns
Touchstone Ultra Short Duration Fixed Income Y TSYYX 0 44 expense ratio 0 25 TSYYX is part of the Government Bond Short fund category Often seen as risk free assets these funds hold securities issued by the U S federal government and they focus on the short end of the curve This fund has yearly returns of 0 26 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
AB Allocation Market Real Return R AMTRX Expense ratio 1 54 Management fee 0 75 AMTRX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With annual returns of just 2 95 it s no surprise this fund has received Zacks Strong Sell ranking
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Eagle Mid Cap Growth A HAGAX is a fund that has an expense ratio of 1 05 and a management fee of 0 52 HAGAX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion With yearly returns of 10 41 over the last five years this fund clearly wins
City Natural Rochdale US Core Equity Income Service Class CNRVX Expense ratio 0 78 Management fee 0 4 CNRVX is a part of the Large Cap Growth mutual fund category which invest in many large U S companies that are expected to grow much faster compared to other large cap stocks CNRVX has managed to produce a robust 11 55 over the last five years
Lord Abbett Developing Growth I LADYX has an expense ratio of 0 69 and management fee of 0 51 LADYX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under 2 billion and large growth opportunities With yearly returns of 10 13 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
MS | MarketPulse Box Flattened on Guidance Revenue Miss | Investing com Cloud based content management company Box sank Thursday after it posted revenue and guidance that fell short of expectations
Box NYSE BOX reported fourth quarter earnings of 6 cents a share well above estimates from Investing com for earnings of 2 cents a share But revenue of 163 7 million fell short of estimates for 164 17 million Its shares plunged 20
The company blamed the mixed results on weaker than expected billings generated for its subscription services in the fourth quarter driven by underperformance in Europe the Middle East and Asia and longer sales cycles for some seven figure deals
Despite some encouraging metrics such as an increase in deals worth more than 100 000 the numbers show that Box s focus on strategic selling has yet to yield gains Morgan Stanley said in a note to clients
Box grew billings 16 but that was below the Morgan Stanley NYSE MS s anticipated 26
Billings growth for the current quarter is expected to remain challenged as the company guided in the low single digit range In 2020 however growth rates are expected to normalize
KeyBanc Capital Markets downgraded its rating on Box to sector weight from overweight
For the first quarter Box expects revenue of 161 million to 162 million on losses in a range of 0 06 to 0 05 a share below estimates for a 0 01 loss a share on revenue of 169 81 million |
MS | Bond Traders Need to Get Their Mojo Back | Bloomberg Opinion This year s rebound in stocks looks to be running out of steam geopolitical risks are on the rise and central banks are turning dovish amid evidence that the global economy is slowing And yet the bond market is doing a whole lot of nothing when it should be roaring ahead That should soon change
As of late Thursday the yield on the benchmark 10 year U S Treasury note had traded in a tight range of just 12 basis points during February making it the most static month since the 1970s according to Bloomberg News s Elizabeth Stanton Also the Bloomberg Barclays LON BARC U S Treasury Index was on track to deliver its first negative monthly return since October Now this could be a sign that bond traders feel that the broader economy won t get much worse That makes sense given that the latest forecasts show most economists don t expect a recession to hit until late 2021 But recent history suggests there s plenty of room for yields to move lower Medley Global Macro Managing Director Ben Emons has noticed an interesting relationship between Chinese manufacturing and bonds yields More specifically Emons pointed out in a note to clients Thursday that yields tend to track the new orders portion of the China purchasing managers index with a six month lag Given that the most recent China PMI released Thursday fell to its lowest level since early 2016 the bond market should see sustained demand and lower yields in the months ahead
After real GDP growth of 3 2 percent in 2018 aggregate growth among the Group of 20 economies will slow to 2 9 percent in 2019 and 2 8 percent in 2020 Moody s Investors Service said in a research note Thursday The credit rating firm noted that key risks include a sharper than expected slowdown in China with negative spillovers for global growth a further escalation of U S China trade tensions and a renewed tightening of financial conditions
STOCKS ARE GETTING STUCKGlobal stocks ended a lackluster February with the MSCI All Country World Index falling the most in about three weeks Many markets worldwide seem to be getting stuck at key levels of resistance For the S P 500 Index that level is 2 800 The benchmark did basically nothing the first three days this week moving less than 3 5 points each day for a total journey of 7 2 points The last time the gauge had such a small move over three sessions was 14 months ago according to Bloomberg News s Elena Popina The market has been jumping over the small hurdles on the way up but we re approaching the 2 800 line and the hurdle all of a sudden is four stories tall Michael Antonelli a managing director and market strategist at Robert W Baird Co told Bloomberg News We need some serious progress in U S China trade talks for the S P 500 to breach that line As of right now the markets are not convinced that we re ready for new highs At the same time long short hedge funds on Credit Suisse SIX CSGN Group AG s prime brokerage platform have reduced their net exposure to equities in the last two weeks as they ramp up short bets reports Bloomberg News s Justina Lee After slashing positions amid last quarter s carnage their gross positioning remains well below last year s peaks a 13 percent dip for long short managers and 22 percent lower for quants
CURRENCY TRADERS MISS YET AGAINIf there is one word I would use to describe currency traders these days it would probably be hapless The Citi Parker Global Currency Index which tracks nine distinct foreign exchange investment styles fell in each of the last four years and is down again in February following a decline in January The 1 33 percent drop for February is among the worst in recent years There are a few takeaways from this dismal performance The first is that currency traders are a victim of low volatility which generally provides fewer opportunities to exploit wild market swings Overall volatility in the foreign exchange market as measured by a JPMorgan NYSE JPM index is about the lowest since 2014 The euro dollar cross which sees roughly 1 25 trillion of transactions a day has traded within 3 4 U S cents since the beginning of 2019 marking the tightest quarterly range since the inception of the euro two decades ago according to Bloomberg News s Katherine Greifeld The most plausible reason for the decline in volatility has been the dovish shift in central bank rhetoric To the strategists at Morgan Stanley NYSE MS the drop in volatility suggests markets aren t prepared for potential negative shocks They cite the large 0 5 percent decline in the South Korean won on Thursday after summit talks between the U S and North Korea unexpectedly broke down as just one example of how the currency market is too complacent especially given the number of potential flash points out there These include tensions between India and Pakistan U S China trade talks that continue to drag on the danger of a no deal Brexit and the political and humanitarian crisis in Venezuela
EMERGING MARKETS ARE GETTING TIRED February wasn t very kind to emerging markets outside of bonds where yield spreads narrowed to their tightest levels since October The MSCI Emerging Market Index of equities was essentially flat and a similar index measuring the performance of their currencies fell for the first time since October Such results don t speak well for the outlook for riskier assets in general That s especially true now that one of the bellwethers in emerging markets looks to be running into some trouble Data on Thursday showed India s economy expanded 6 6 percent in the fourth quarter from a year earlier down from 7 percent in the July September period Waning consumer demand dampened momentum in the economy where domestic spending makes up about two thirds of GDP according to Bloomberg News s Anirban Nag and Vrishti Beniwal And that was before this week s tensions with neighboring Pakistan This comes at a tricky time for both sides as India heads into the general elections in April May 2019 while Pakistan is in a tenuous economic position Radhika Rao an economist at DBS Bank told Bloomberg News Tensions are likely to overshadow the growth data she added With it s 2 6 trillion economy India is the I in the BRIC acronym that also includes Brazil Russia and China So any weakness in Indian markets has the high potential to turn off emerging market investors globally
BEEF IS ONE COMMODITIES BRIGHT SPOTThe commodities market eked out its second straight monthly gain in February with the Bloomberg Commodity Index rising less than 1 percent following January s big 5 23 percent surge The results for February would have been much better if not for agricultural commodities which tumbled about 4 percent and negated much of the gains in energy and industrial metals which rallied more than 5 percent and 3 percent respectively On the whole this is a positive sign for the global economy or at least shows that worries about an imminent recession are overblown But even within the agriculture complex there are reasons for optimism Take the cattle market which is booming Futures for April delivery touched a record high for the contract in Chicago this week at 1 30 a pound The contract which debuted in late 2017 is up 18 percent from a low in April according to Bloomberg News s Lydia Mulvany Beef is a premium protein and consumers generally cut back in times of trouble in favor of less expensive chicken and pork And yet sales in the past four weeks for delivery 22 to 60 days out are up 16 percent compared with a year earlier Mulvany reports citing the Steiner Consulting Group s Daily Livestock Report Sales over the past four weeks for delivery 60 to 90 days out are even more impressive more than double from 2018 Retailers that want to once again promote ribs strips or other such cuts now have to jump on this earlier in order to make sure they can get the regular supply according to the Daily Livestock Report
TEA LEAVESThe Commerce Department said Thursday that U S economic growth decelerated to a 2 6 percent annualized rate in the fourth quarter Still that was seen as mildly positive as economists had forecast a rate of 2 2 percent But on Friday market participants are likely to find out that things are probably much weaker than they seem That s because the government is forecast to say that real personal spending in December which excludes inflation fell 0 3 percent in the biggest decline since 2009 Consumer spending accounts for two thirds of the economy There s more The Institute for Supply Management is expected to say that its monthly manufacturing index dropped to 55 7 for February from 56 6 in January Although that would still indicate healthy growth the risk is to the downside The reason is that the index unexpectedly rose in January propelled higher as the orders portion of the index jumped by the most since 2014 and production gained the most in eight years So it makes sense that there could be a big give back in the February numbers especially since other manufacturing data has been a mixed bag
DON T MISSCentral Banks Signal Need to Be Selective Mohamed A El ErianForget FAANGs Stock Bubble Could Be in the Cloud Shira OvideThe Obama Trump Economy Is Still Chugging Along Justin FoxDraghi the Heretic Has a Vision for Europe Ferdinando GiuglianoSouth Korea s Economy Is Alive But Not Well Daniel Moss |
MS | There Are Some Losers as Chinese Stocks Rise in MSCI Indexes | Bloomberg Global equity investors wanting greater Chinese stock exposure without taking on active management strategies have reason to celebrate MSCI Inc s latest tweak to benchmark indexes Yet the move also creates some losers
With China being added to the investible list of indices tracking funds will have to rebalance their holdings to accommodate for this which could result in an overhang for other indices in the region said Justin Tang head of Asian research at United First Partners a firm specializing in event driven analysis
MSCI will lift China listed stocks in its Emerging Markets Index to 3 3 percent by November from the current 0 72 percent While billions of dollars are set to flow into so called A shares as a result the weighting of Southeast Asian markets will likely drop to about 7 7 percent from 8 percent now Morgan Stanley NYSE MS analysts Sean Gardiner and Aarti Shah wrote in a report published Friday A mild dilution but overhang nonetheless
That may help explain why the Philippine Stock Exchange Index was down 1 percent as of 11 09 a m in Manila while the MSCI Asia Pacific Index was up 0 2 percent Nicky Franco head of research for Abacus Securities Corp in Manila calculates the potential outflows from the Philippines at about 700 million he wrote in a note Friday
By contrast the ChiNext Index of Chinese small cap and tech stocks gained 1 2 percent and the CSI 300 Index advanced 0 9 percent Once the latest inclusion is completed it will start in May there will be 253 large and 168 mid cap China shares in the index
Still it may not be all bad news if the net result is that global investors get more interested in the broader Asian region
China s greater weight is at the expense of other countries whose weights get adjusted down said Shane Oliver head of investment strategy and chief economist at AMP Capital Investors Ltd in Sydney But that s only a short term impact China s greater weight may in time attract more funds to the Asian region |
MS | Morgan Stanley Keeps Faith in Some of EM s Worst Currency Losers | Bloomberg South Africa s rand Turkey s lira and Brazil s real may be among the worst performing emerging market currencies in the past month but Morgan Stanley NYSE MS isn t giving up hope
The lender s VIRP model which produces buy and sell signals based on volatility and idiosyncratic risk premia remains long on those units as well as Russia s ruble even as a rally in developing nation assets loses steam amid rising geopolitical risks and lingering concerns over a U S China trade dispute
Despite the recent pause in the EM rally the model continues to have a positive bias toward the asset class amid dovishness across major central banks and expectations of further progress in the trade dispute between China and the U S Andres Jaime a New York based quantitative strategist at Morgan Stanley wrote in a client note We do acknowledge that EM risk premia have been reduced and more reliance on a softer dollar is warranted in order to trigger a second rally leg in EM
The Morgan Stanley model is short Colombia s peso Malaysia s ringgit Indonesia s rupiah and the Thai baht while showing the Chinese renminbi close to triggering a sell signal Jaime wrote The signals should be used as inputs in investment decisions rather than rule based trading strategies he noted |
JPM | Advance Auto Parts 4 on short term JPMorgan concerns | JPMorgan lowers Advance Auto Parts AAP 3 6 to a Neutral rating from Overweight and scratches the stock off its Analyst Focus List While we believe AAP has the right management team in place with effective long term strategies key topline drivers heading into 2020 appear to be more incrementally negative weather less inflation slower GDP growth than positive car park better while its DIY business is already on shaky ground writes analyst Christopher Horvers Horvers sees the margin unlock story for AAP at risk of not coming to fruition
JP s price target goes to 163 from 168 after some downward revisions to earnings estimates The average sell side PT on Advance Auto Parts is 173 47 |
JPM | JPMorgan defends Five Below | JPMorgan digs into Five Below FIVE 12 9 after the retailer s disappointing sales update pointing to the shortened calendar this year in particular Importantly and adjusting the calendar apples to apples FIVE comped positive over the key Black Friday Cyber Week noting material acceleration above plan sales in the 7 days leading into Christmas with same store sales returning to at least 2 3 January to date particularly noting a material turn in Tech supported by the high end of management s updated guidance implying a 600bps improvement relative to Nov Dec writes analyst Matthew Boss in his detailed breakdown Boss also provides notes on a follow up with Five Below management Taking a step back while not providing excuses management cited a more discretionary offering vs grocery peers driving a larger condensed calendar impact noting a 4Q13 similar 450bps Holiday miss versus guidance he updates
JPMorgan sticks with an Outperform rating on Five Below
ICR20 |
MS | The Role Dividends Can Play In International Equity Investing | Summary
Dividend yielding stocks can make a meaningful contribution to a portfolio in international markets as well as domestic
Higher returns are not always associated with higher risk
High dividend investing has been beneficial over most years and investment horizons
An emphasis on dividends appears to contribute across cycles sectors and markets
Introduction
Domestic equity investors have long understood the importance of dividends A dividend policy can be valuable beyond the income it provides as investors can gain confidence in the company s financial strength
What may be overlooked is that dividends can play at least as important a role on a global scale
Dividends Clearly Matter
To explore the contribution dividends make in global markets we studied the performance of equity securities from outside the U S from 12 31 1993 through 6 30 2017 focusing on companies with market capitalizations greater than or equal to 100 million and less than or equal to 5 billion This study demonstrates that non U S small to mid capitalization stocks with dividend yields have historically produced higher levels of total return than non dividend payers The level of dividend yield also played a role in the results
The graphics below show returns for this universe grouped into thirds by dividend yield as well as a separate category for companies that don t pay any dividend Over the entire period the equal weighted annual returns for the universe of securities averaged 6 95 In contrast stocks that paid dividends averaged a 8 85 total return Returns on stocks that didn t pay any dividend were 2 09
The level of dividend yield also was tied to returns The top third yielding stocks produced a return of 14 95 compared to a return of 1 91 for the bottom third
These results are similar to studies demonstrating long term outperformance among domestic value strategies including a focus on stocks with low price earnings P E ratios as well as those with low price book P B and low price cash flow P CF A high dividend yield indicates a low price relative to a financial fundamental dividends and low P E low P B and low P CF also imply a low price relative to financial fundamentals
Value strategies may outperform because investors become too pessimistic about the prospects for stocks trading at cheap valuations with the result that prices are driven down even further until they become oversold Value investors capitalize on this excess concern by identifying unduly inexpensive stocks in anticipation the market will eventually recognize the overreaction This is not to say that all inexpensive stocks are sound investments Low multiples are warranted for some companies As with any singular screening mechanism additional research is called for to further assess the potential outlook for a stock
Greater Efficiency
Efficient market theory suggests that higher returns should be accompanied by higher risk Dividend paying stocks despite higher levels of return had lower risk standard deviation than the broader universe as well as lower beta than non dividend paying companies
Further stocks that didn t pay dividends had much higher risk to go along with their lower returns Therefore on a risk adjusted basis dividend payers were better with higher yielding names outperforming those with low or no yield Stocks in the top third had a Sharpe ratio of 0 55 versus 0 20 for the broader universe Also the information ratio for stocks in the top third was 0 71 versus 0 77 for those in the bottom third In sum dividends contribute to total return while also helping to create a more attractive risk profile for a stock
Holding Period Impact
Since many investors do not have the over 20 year investment horizon shown in our first table we also considered the impact of dividend investing over various shorter spans The table below shows the percentage of periods in which the stocks in a particular grouping based on yield outperformed the broader stock universe
The results are compelling High yielding stocks outperformed in 100 of the three year time periods Even over the shortest time period considered three months the top group outperformed nearly 77 of the time These results demonstrate dividend investing s viability over both longer and shorter time frames
The Impact of Market Cycles
Since investing does not take place in a static environment we examined how high dividend yield stocks perform in a variety of market cycles The following graphs show the excess returns of stocks in the top third by yield versus their broader universe over one and two year holding periods from 1994 to the present
During the internet bubble financial bubble and the beginning phases of economic expansion in the early 1990s and 2000s relative returns from yield investing waned High yield investing showed better returns however during most other market periods
The table in the bottom of Figure 3 shows the efficacy of yield strategy during quarters representing various market environments Over the time period considered there were 58 quarters when the universe was up and 36 when the universe was down During down markets dividend paying stocks in the top fractile outperformed 94 of the time This appears to align with performance of value investing strategies in general which typically perform better when markets are depressed During markets with positive returns the high dividend stocks still outperformed a respectable 66 of the time
High Dividend Investing has Worked in Most Sectors
High yield stocks are often associated with specific sectors and these results could be skewed by over or under weights among them To explore this impact we examined dividend investing specific to individual areas of the market We first bundled the stocks in our universe into a number of different groups which included industries categorized into sectors and industries combined to form growth defensive and cyclical super sectors Within each group as well as the broader universe we then subtracted the returns of the low yielding stocks in the bottom third of dividend payers from those in the top third
The results shown in the graph above indicate that investing with a focus on higher yielding stocks can be an effective strategy irrespective of sector
Improving the Model
While there is a great deal of evidence supporting the benefits of high dividend yield investing it is prudent for portfolio managers to rely on more than just this factor when making decisions Some stocks pay attractive dividends because of their financial stability robust earnings and commitment to shareholders Others may produce high yields while undergoing extreme and perhaps irreversible duress or may only be achieving them with unsustainably high payout ratios So while a dividend screen seems to be a useful component in the evaluation process we are not suggesting that it stand alone
The tables below show how combining dividend yield with a number of other fundamental criteria might help further refine stock selection Criteria we considered are P B to look for modest valuations one year dividend growth an indicator of earnings growth and payout ratio a potential measure of safety Each panel shows a total of nine fractiles three for dividend yield times three for the additional factor within the dividend payer universe Generally fractile one represents the best third the highest yield lowest P B highest growth and lowest payout ratio while fractile three represents the less desirable end of the spectrum
The data illustrates that adding low P B high dividend growth or low payout to the selection criteria in each case appears to improve the model over a dividend yield only approach These are certainly not the only quantitative screens that can be used but they aptly illustrate that the employment of a combination of factors may have an even greater potential to outperform than using the dividend component alone
This paper utilizes data sourced from the FactSet Fundamentals global database from 12 31 1993 through 6 30 2017 Statistical tests were run in FactSet Alpha Testing software Stocks with dividend yields above 100 and below 0 were classified as not available but are included in the Universe In total there were 772 837 possible data items Companies in the resulting data set were segmented as divided payers and non dividend payers Dividend payers were further grouped into three fractiles based on yield with fractile 1 representing the highest payers and fractile 3 representing the lowest Dividend yield was calculated as annual dividends divided by the current share price and fractiles were rebalanced every three months Equal weighted total returns for each fractile and the universe were computed for three six 12 24 and 36 months
Disclaimer
Past performance does not guarantee future results
An investor should consider the Funds investment objectives risks and charges and expenses carefully before investing or sending money This and other important information may be found in the prospectus pdf To obtain a print prospectus call 800 432 7856 Please read the prospectus carefully before investing
The International Value Fund invests primarily in small foreign companies selected on a value basis Such securities generally are more volatile and less liquid than those of larger companies Foreign securities have additional risk including but not limited to exchange rate changes political and economic upheaval and relatively low market liquidity These risks are magnified in emerging markets
Value investments are subject to the risk that their intrinsic value may not be recognized by the broad market
There is no assurance that dividend paying stocks will mitigate volatility
Dividend paying stocks cannot eliminate the risk of investment losses Dividends are not guaranteed and a company s future ability to pay dividends may be limited A company currently paying dividends may cease paying dividends at any time
Sector and industry classifications as determined by Heartland Advisors may reference data from sources such as FactSet Research Systems Inc or the Global Industry Classification Codes GICS developed by Standard Poor s and Morgan Stanley NYSE MS Capital International
Hypothetical examples are for illustrative purposes only and do not represent the returns of any particular investment There is no guarantee that any particular investment strategy will be successful
Heartland s investing glossary provides definitions for several terms used on this page
The Heartland Funds are distributed by ALPS Distributors Inc
The statements and opinions expressed in the articles or appearances are those of the presenter Any discussion of investments and investment strategies represents the presenters views as of the date created and are subject to change without notice The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual Any forecasts may not prove to be true
Robert C Sharpe
Sharpe is Vice President and Portfolio Manager of the International Value Fund He has 34 years of industry experience 4 at Heartland
Dr G Kevin Spellman
Spellman CFA is Senior Lecturer and Director of Investment Management Certificate Program at the University of Wisconsin Milwaukee s Lubar School of Business His academic experience includes Durham University UK the IE Business School Madrid The Ohio State University and the University of Wisconsin Madison He has investment experience working at the State Teachers Retirement System of Ohio and CUNA Mutual He holds a Ph D in Accounting and Finance from Durham University UK M S in Finance from the University of Wisconsin Madison and a B S in Finance from the University of Wisconsin La Crosse |
MS | Technically Speaking Bullish Hopes Clash With Bearish Signals | In this past weekend s missive I quoted Jeffrey Hirsch editor of the StockTrader s Almanac on the entrance of the market into the seasonally weak 6 month period for stocks
May officially marks the beginning of the Worst Six Months for the Dow and S P 500 To wit Sell in May and go away May has been a tricky month over the years a well deserved reputation following the May 6 2010 flash crash and the old May June disaster area from 1965 to 1984 Since 1950 midterm year Mays rank poorly 9 Dow and NASDAQ 10 S P 500 and Russell 2000 8 for Russell 1000 Losses range from 0 1 by Russell 1000 to 1 9 for Russell 2000
For the near term over the next several weeks the rally may have some legs But as we get into the summer doldrums and the midterm election campaign battlefront becomes more engaged we expect the market to soften further during the weakest two quarter stretch in the 4 year cycle
Here is the history of a 10 000 investment
Despite the weight of evidence to the contrary the ever bullishly biased commentators quickly point out there were many years where the selling in May would have left you behind in performance
But again the evidence is quite clear
Nonetheless as we kick off the month of May the commentary remains optimistic as earnings have been coming in above already high expectations due to the reduction in corporate tax rates and outstanding float With the economy still expanding unemployment rates near lows and consumer confidence near highs what s not to love
From portfolio management viewpoint it is the disconnect between the good news and recent market action that has my full attention
Warning Signs
While there are many suggesting the recent correction is just a healthy consolidation process within an ongoing bull market which so far it has proved to be there is a difference between today and previous corrections following the financial crisis
First The Federal Reserve was still reinvesting proceeds from the bloated 4 Trillion balance sheet which provided for intermittent pops of liquidity into the financial market The liquidity is now running on empty at a time where interest rates and inflationary pressures are rising
Secondly despite all of the good news from the earnings front as I stated previously the surge in the market from July of 2017 had already incorporated those expectations With current prices expecting things to get even better such may not be the case as the benefit from tax cuts will begin to fade in Q3 as noted next
But even if we give Wall Street the benefit of the doubt and assume their predictions will be correct for the first time in human history stock prices have already priced in twice the rate of EPS growth
Third as Doug Kass quoted yesterday from Morgan Stanley
Our experience tells us that these leaderless periods typically occur during important transitions in the market So what is that transition today and how can we harness it to make money Sticking with our original thesis for 2018 we think the market is digesting the fact that the tax cut last year has created a lower quality increase in US earnings growth that almost guarantees a peak rate of change by 3Q Furthermore the second order effects of said tax cuts are not all positive
Specifically while an increase in capital spending and wages creates a revenue opportunity for some it also creates higher costs for most The net result is lower margins particularly since the tax benefit is 100 percent below the line Now with the pricing mechanism for every long duration asset 10 year Treasury yields rising beyond 3 percent we have yet another headwind for risk assets
Perhaps most importantly for US equity indices these higher rates are calling into question the leadership of the big tech platform companies the stocks that may have benefited from the QE era of negative real interest rates more than any area of the market When capital is free growth is scarce and the discount rate is negative in real terms market participants reward business models that can use that capital to grow Dividends and returns on that capital today are less important with the discount rate so low But with real interest rates rising toward 1 percent that reward structure may be getting challenged 2018 will mark an important cyclical top for US and global equities led by a deterioration in credit Narrowness of breadth and a lack of leadership suggest that this topping process is in the works and will ultimately lead to a fully defensive posture in the market later this year
Fourth rising interest rates are a problem While in the short term the economy and the markets due to momentum can SEEM TO DEFY the laws of gravity ultimately they act as a brake on economic activity This is particularly an issue when tax cuts have boosted bottom line earnings per share for corporations but higher rates oil prices and tariffs will begin to lessen that benefit This not only applies to corporations but to already cash strapped consumers which have seen their tax cut vanish through higher health care food and energy costs
Fifth It is important to remember that US markets are not an island What happens in global financial markets will ultimately impact the U S The chart below shows the S P 500 as compared to the MSCI Emerging Markets and Developed International indices I have highlighted previous peaks and subsequent bear markets as noted by the sell signals in the lower panel Currently the weakness in the international markets is being dismissed by investors but it most likely should not be
Lack Of Low Hanging Fruit
As we head into the seasonally weak period of the year it may well provide an opportunity for more seasoned and tactical traders However for longer term investors like me there is a lack of low hanging fruit to harvest particularly given the current backdrop
The failure of the markets to rally on Monday continues to reinforce the overhead resistance As shown below with confirmed weekly sell signals in place it has historically been a good idea to be a bit more risk adverse More importantly the market currently remains below its previous bullish trend line and moving averages which keeps downward pressure on asset prices currently
With price action still confirming relative weakness and the recent rally primarily focused in the largest capitalization based companies the action remains more reminiscent of a market topping process than the beginning of a new leg of the bull market As shown in the last chart below the current topping process when combined with underlying sell signals is very different than the action witnessed in 2011 or 2015 I will argue the decline that began in 2015 would have likely been substantially larger had it not been for global coordinated Central Bank interventions
While I am not suggesting that the market is on the precipice of the next financial crisis I am suggesting that the current market dynamics are not as stable as they were following the correction in 2011 or in 2015 This is particularly the case given the threat of a tightening of monetary policy
The challenge for investors over the next several months will be the navigation of the seasonally weak period of the year against a backdrop of warning signals Importantly while the always bullish media tends to dismiss warning signs as just being bearish historically such unheeded warnings have been detrimental It is my suspicion this time will likely not be much different |
JPM | Cracks Spread In The Bullion Banks Price Management System | Department of Justice prosecutors charged a sixth JPMorgan NYSE JPM executive for cheating in the precious metals markets
Jeffrey Ruffo stands accused of racketeering and spoofing metals prices from 2008 2016 along with other crimes including conspiracy to commit wire fraud
The indictment outlines nearly a decade spent coordinating with other traders in JPMorgan s precious metals department to rig prices The activity includes thousands of fraudulent trades placed for two purposes
The first was to benefit favored JPMorgan NYSE JPM clients at the expense of other investors
The second was to benefit JPMorgan NYSE JPM and the traders directly by cheating their own clients
The investigation is ongoing and more indictments including charges against traders at other bullion banks may be on the way It appears that at least some of the executives now facing prison time have decided to cooperate and provide evidence against others involved
The DOJ prosecutions are certainly a step in the right direction It is getting harder for even the staunchest defenders of futures trading to dismiss price manipulation as a mere conspiracy theory
The genuine prospect of prison time may be giving pause to any crooked bankers still working in the gold and silver markets And the story should be an eye opener for bullion bank clients and speculators still gambling in the rigged casino also known as the COMEX
For those who have been watching this story it is hard to fathom why anyone is still expecting fair treatment in the futures markets It is clear however that plenty of confidence remains Gold open interest made new all time highs last week
As long as investors rely upon the COMEX and other exchanges for price discovery it is the job of federal regulators to do something to curb the rampant cheating Unfortunately the Commodity Futures Trading Commission the primary regulator for futures markets is still captured and or incompetent
The CFTC has taken no responsibility for its failed 5 year investigation of price manipulation in the silver market Agency officials somehow managed to overlook the massive pile of evidence that DOJ investigators have rounded up
They have taken almost no action despite the DOJ indictments and guilty pleas JPMorgan NYSE JPM is still active in the markets even though its bullion trading desk seems to operate like a criminal enterprise
CFTC officials are in a quandary similar to those who constantly dismiss allegations of price manipulation as mere conspiracy theory
It is getting harder and harder for them to ignore the facts
Congressman Alex Mooney from West Virginia is asking Attorney General Bill Barr to have a look at the price rigging which continues largely unchecked by the CFTC Price spoofing may just be the tip of the iceberg in terms of criminal activity
The Congressmen previously sent letters to the CFTC with pointed questions about some of the questionable activity in the futures markets but has yet to get a response
All this begs the question about what the CFTC might do if dozens of bankers at multiple banks are ultimately convicted Will officials there still be able to sit on their hands and protect their crooked friends on Wall Street from enforcement
Clint Siegner is a Director at Money Metals Exchange the national precious metals company named 2015 Dealer of the Year in the United States by an independent global ratings group A graduate of Linfield College in Oregon Siegner puts his experience in business management along with his passion for personal liberty limited government and honest money into the development of Money Metals brand and reach This includes writing extensively on the bullion markets and their intersection with policy and world affairs |
JPM | Low Volatility ETFs In Focus | After a recent series of new highs Wall Street retreated on a doubt over trade deal that has undermined bullish sentiments The latest reports revealed that the phase one trade deal between Washington and Beijing may be delayed and could slide into next year as Beijing presses for tariff rollbacks And if the trade deal is not reached President Donald Trump would raise tariffs on Chinese imports with the Dec 15 deadline This has sparked market volatility once again leading to higher demand for lower risk securities read On the other hand monetary easing policies and better than expected earnings are providing enough impetus to the stock market Notably lower rates have made borrowings cheaper providing a boost to both investment in new projects and repayment of a higher rate debt Further a spate of better than expected data added to the strength This is especially true as October retail sales have rebounded from a sluggish September and American consumers continue to be willing to spend which is good news for domestic economic growth Against such a backdrop those seeking to remain invested in the equity world could consider low risk ETFs by picking low volatility products Why Low volatility ETFs have the potential to outpace the broader market in an uncertain environment providing significant protection to the portfolio This is because these funds include more stable stocks that have experienced the least price movement in their portfolio Further these allocate more to defensive sectors that usually have a higher distribution yield than the broader markets read Given these characteristics these products are on limelight yet again While there are several options in the space we have presented those ETFs that hit new highs in the last trading session and a few that are the most popular picks ETFs That Hit New HighsFidelity Low Volatility Factor ETF This fund tracks the Fidelity U S Low Volatility Factor Index holding 129 stocks in its basket with none accounting for more than 4 72 share From a sector look the ETF is skewed toward the information technology sector at 22 1 while healthcare financials and consumer discretionary round off the next three spots with a double digit allocation each The fund has been able to garner 329 1 million in AUM so far and average daily volume is also moderate at 76 000 shares FDLO charges 29 bps in annual fees from investors SPDR SSGA US Large Cap Low Volatility Index ETF This product tracks the SSGA US Large Cap Low Volatility Index holding 127 stocks with each accounting for less than 2 of assets Financials dominates the fund s returns with one third share while information technology and industrials receive double digit exposure each LGLV has amassed 926 5 million in its asset base and charges 12 bps in annual fees Volume is moderate exchanging more than 112 000 shares in hand on average JPMorgan NYSE JPM U S Minimum Volatility ETF This ETF tracks the JP Morgan US Minimum Volatility Index holding well diversified 221 stocks in its basket Consumer goods healthcare and utilities are the top three sectors The ETF has AUM of 108 6 million and average daily volume of 31 000 shares It charges 12 bps in annual fees and has a Zacks ETF Rank 3 Hold read iShares Edge MSCI Min Vol USA Small Cap ETF With AUM of 413 3 million this product offers exposure to U S small cap stocks with potentially less risk and follows the MSCI USA Small Cap Minimum Volatility USD Index It holds 386 stocks in its basket with each accounting for less than 2 1 share Here financials real estate information technology and industrials are the top four sectors with double digit exposure each SMMV charges 20 bps in fees per year from investors and trades in average daily volume of 95 000 shares It has a Zacks ETF Rank 3 ETFs That Are Most PopulariShares Edge MSCI Min Vol USA ETF This fund offers exposure to 212 stocks by tracking the MSCI USA Minimum Volatility Index It is well spread out across a number of securities with none holding more than 1 8 of the assets From a sector look information technology financials consumer staples healthcare and consumer discretionary take the top five spots with a double digit allocation each With AUM of 36 2 billion the product charges 0 15 in expense ratio and trades in solid average daily volume of 4 6 million shares It has a Zacks ETF Rank 2 Buy with a Medium risk outlook Invesco S P 500 Low Volatility ETF This ETF tracks the S P 500 Low Volatility Index and holds 100 securities in its basket with none accounting for more than 1 23 of the assets Utilities real estate and financials make up the top three sectors with a double digit allocation each SPLV has amassed 12 5 billion in its asset base and trades in heavy volume of around 3 7 million shares a day on average It charges 25 bps in annual fees and has a Zacks ETF Rank 2 with a Medium risk outlook read Invesco S P MidCap Low Volatility ETF This fund offers exposure to the mid cap segment with the lowest realized volatility over the past 12 months It follows the S P MidCap 400 Low Volatility Index and holds 80 securities in its basket with none accounting for more than 1 8 of assets Real estate utilities and financials are the top three sectors with a double digit allocation each The ETF has AUM of 3 7 billion and charges 25 bps in annual fees It trades in average daily volume of about 327 000 shares and has a Zacks ETF Rank 3 Bottom LineThese products could be worthwhile for low risk tolerance investors and have the potential to outperform the broader market especially if trade fears continue to dent sentiments Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
JPM | 3 Mutual Fund Misfires To Avoid November 22 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Hartford Global Real Asset A HRLAX 1 25 expense ratio and 0 85 management fee HRLAX is a Global Equity mutual fund investing in bigger markets like the U S Europe and Japan these kinds of funds aren t limited by geography With a five year after costs return of 2 89 you re for the most part paying more in charges than returns
AB Allocation Market Real Return 1 AMTOX Expense ratio 1 09 Management fee 0 85 Over the last 5 years this fund has generated annual returns of 2 52
Alger International Growth B AFGPX This fund has an expense ratio of 1 98 and management fee of 0 71 AFGPX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too With an annual average return of 0 54 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Principal Capital Appreciation R1 PCAMX 1 37 expense ratio and 0 47 management fee PCAMX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With an annual return of 10 21 over the last five years this fund is a winner
Fidelity Select Electronics FSELX is a stand out fund FSELX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach With five year annualized performance of 18 12 and expense ratio of 0 72 this diversified fund is an attractive buy with a strong history of performance
JPMorgan NYSE JPM Large Cap Growth R6 JLGMX has an expense ratio of 0 43 and management fee of 0 45 JLGMX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With annual returns of 14 47 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Deutsche Bank DB Gets Shifted To Lower Risk Bucket By FSB | Per Financial Stability Board s FSB list of global systemically important banks G SIB published late last week Deutsche Bank DE DBKGn NYSE DB has been moved from bucket 3 to bucket 2 This shift indicates that the authorities are now considering the German bank less risky for the financial system As a result of this change Deutsche Bank will now be required to hold lower leverage ratio from 2022 Its risk based capital requirements will not be altered as they are controlled by the German regulator BaFin Also the list is based on data as of 2018 end and does not take into account the changes in 2019 JPMorgan Chase NYSE JPM topped the list yet again and is still considered the most systemically important bank Toronto Dominion Bank TSX TD was a new addition made to the G SIB list at the lowest level Deutsche Bank s overhaul under the leadership of its new CEO Christian Sewing has started to bear fruit Further Sewing is on track with his radical restructuring plans announced in July 2019 which involves massive job cuts and exit from equities trading business The bank also remains involved in offloading its unprofitable business In September Deutsche Bank entered into a deal with BNP Paribas OTC BNPQY per which the former will transfer its prime brokerage business to the latter Though Deutsche Bank s restructuring efforts including cost saving measures look encouraging it is difficult to determine how much the bank will gain considering the prevalent headwinds Dismal revenue performance is another concern Shares of Deutsche Bank have lost around 9 7 on the NYSE year to date against the s growth of 4 1 Deutsche Bank currently carries a Zacks Rank 3 Hold You can see Today s Best Stocks from ZacksWould you like to see the updated picks from our best market beating strategies From 2017 through Q3 2019 while the S P 500 gained 39 6 five of our strategies returned 51 8 57 5 96 9 119 0 and even 158 9 This outperformance has not just been a recent phenomenon From 2000 Q3 2019 while the S P averaged 5 6 per year our top strategies averaged up to 54 1 per year |
JPM | Avoid These 3 Mutual Fund Misfires November 26 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Hodges Fund HDPMX 1 18 expense ratio and 0 85 management fee HDPMX is a Mid Cap Blend mutual fund and usually features a portfolio with stocks of various styles and sizes allowing for diversification within a strategy that focuses on mid cap companies With a five year after costs return of 0 85 you re for the most part paying more in charges than returns
JPMorgan NYSE JPM International Value Fund R2 JPVZX Expense ratio 1 3 Management fee 0 85 Over the last 5 years this fund has generated annual returns of 1 65
Ivy Natural Resources B IGNBX 3 01 expense ratio 0 85 management fee IGNBX is a Sector Energy mutual fund which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector IGNBX has generated annual returns of 10 09 over the last five years Ouch
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Dreyfus Boston Small Mid Cap Growth A DBMAX is a winner with an expense ratio of just 0 98 and a five year annualized return track record of 10 06
DFA US Large Cap Growth Institutional DUSLX has an expense ratio of 0 2 and management fee of 0 17 DUSLX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With annual returns of 12 05 over the last five years this is a well diversified fund with a long track record of success
AB Discovery Growth Adviser CHCYX Expense ratio 0 72 Management fee 0 61 CHCYX is a Mid Cap Blend mutual fund and usually features a portfolio with stocks of various styles and sizes allowing for diversification within a strategy that focuses on mid cap companies CHCYX has produced a 10 45 over the last five years
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Mutual Fund Misfires Of The Market November 27 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Janus Henderson Europe Focus I HFEIX Expense ratio 1 02 Management fee 0 93 After expenses the 5 year return is 2 22 meaning your fees are far higher than the fund s returns
Ivy Global Bond Fund C IVSCX 1 73 expense ratio 0 62 IVSCX is an International Bond Developed mutual fund Focusing on fixed income securities outside from developed nations besides the U S International Bond Developed funds invest in assets from countries like Japan Germany the UK France and Australia This fund has yearly returns of 1 44 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
IVA International Fund C IVICX 2 01 expense ratio 0 9 management fee This fund has yielded yearly returns of 1 06 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
JPMorgan NYSE JPM Small Cap Growth Fund R2 JSGZX Expense ratio 1 49 Management fee 0 65 JSGZX is a Small Cap Growth mutual fund and tends to feature small companies in up and coming industries and markets This fund has achieved five year annual returns of an astounding 13 24
Frost Growth Equity Investor FACEX Expense ratio 0 88 Management fee 0 5 FACEX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks FACEX has managed to produce a robust 12 16 over the last five years
Harbor Global Leaders Investor HGGIX has an expense ratio of 1 27 and management fee of 0 75 HGGIX is a Global Equity mutual fund These funds invest in large markets like the U S Europe and Japan and operate with very few geographical limitations With yearly returns of 10 37 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
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MS | Wall St Week Ahead May be time for growth to run out of gas | By Chuck Mikolajczak NEW YORK Reuters A return to fashion of growth stocks in 2019 helped lead the overall market out of a year end shakeout but another multi year run of growth performing better than value may not be in the cards The S P 500 has rallied nearly 18 percent since its Dec 24 low During that time the Russell 1000 Growth index has fared even better with a gain of almost 20 percent while the Russell 1000 Value index has lagged with a gain of about 17 percent That marks a reversal from the fourth quarter when value outperformed as stocks nearly tumbled into bear market territory a trend some analysts feel will return as the market grapples with several major headwinds such as Brexit and trade negotiations Growth investors typically search for companies that have higher profit growth and margins while value investors look for stocks that seem inexpensive Shortly after the S P hit its most recent record on Sept 20 thanks to the outperformance by growth especially technology stocks the spread between the Russell 1000 growth and value indexes had surpassed the levels hit during the end of the dot com era The fourth quarter selloff helped that narrow but it began to widen again shortly before the new year The valuation imbalance we have seen between growth and value in the largecap space when we have seen that inflection point in the past there has been a very powerful long term rally where value has outperformed growth and we think that is coming up said Phil Orlando chief equity market strategist at Federated Investors in New York Graphic Historic spread between value and growth stocks Graphic Russell 1000 growth vs value spread In a recent note to clients Morgan Stanley NYSE MS equity strategist Michael Wilson said that the stocks that got hit first and hardest during last year s rolling bear market would lead the recovery this year and rally the hardest That prediction appears to be playing out as areas such as transportation considered cyclical value have been among the leaders to the upside this year Wilson anticipated the Federal Reserve will hold off raising interest rates further and that the global economy would bottom in the first half He favors value over growth with a focus on cyclical over defensive stocks Value stocks also remain cheap relative to growth shares with their widest forward price to earnings ratio spread in over a decade And while investor worries about a recession which helped fuel the fourth quarter sell off have abated a number of headwinds remain that could make value more attractive as market uncertainty rises There are still a lot of headaches coming whether it is Brexit China what is the trade package going to look like the legal stuff in Washington said Steve DeSanctis equity strategist at Jefferies in New York The Russell 1000 Value forward PE also sits right at its long term average of about 13 8 while the Growth index is nearly 20 well above its historic average of 17 5 Graphic Forward PE of Russell Growth and Value indexes One challenge even though value is relatively cheap is that financials have a heavy weighting in value indexes and a Fed pause will make it harder for those firms to grow profits Even though as of the last reconstitution of Russell indexes in June the financial services sector saw the most significant decrease in index weight in the largecap 1000 value index it still was 29 1 percent In the Russell 2000 Smallcap Value financials command a weighting of 40 5 percent If value is going to work it has to be financials said Mark Stoeckle CEO at Adams Funds in Baltimore in an interview with Reuters
The one thing people were counting on in the first half of 2018 with the Fed was it was going to continue to raise rates this was going to be good for banks and not so much anymore |
MS | India s economy seen losing momentum ahead of election | By Manoj Kumar NEW DELHI Reuters India s economy appeared to be losing momentum in the approach to a general election that must be held by May as a Reuters survey of economists forecast that growth slipped to 6 9 percent annually in the October December quarter If the forecast proves accurate India will post its slowest growth in five quarters making it harder for Prime Minister Narendra Modi s Bharatiya Janata Party BJP to persuade voters that government policies were delivering economic success The gross domestic product and the second advance estimates for the 2018 19 fiscal year ending in March will be released on Thursday around 1200 GMT Weaker domestic and external demand were key factors behind the economists expectations of sub 7 percent growth India would still be growing faster than China s 6 4 percent growth in the same quarter but its economy has decelerated from the more than two year high of 8 2 percent growth posted in the April June quarter The current growth numbers may look respectable but Modi faces a criticism that he has not done enough for the manufacturing sector and create enough jobs for millions of youth entering the jobs market every month Growing signs of weakness in India most alarmingly the desperation of rural communities whose income have been hit by falling prices for farm produce forced Modi earlier this month to increase state spending and make direct cash transfers to farmers That could marginally help growth rates but it will increase the government s debt This month the Reserve Bank of India RBI cut its policy interest rate by 25 basis points to 6 25 percent and changed its stance to neutral to boost a slowing economy as inflation has come down sharply The economic growth slowed in December quarter following weaker consumption as reflected by auto sales and slowdown in credit after a crisis in non banking financial company sector A Prasanna chief economist at ICICI Securities Primary Dealership in Mumbai said Prasanna said economic growth in December quarter could fall to as low as 6 4 percent Economic growth could suffer from a possible slowdown in state spending in the two months before the election But Prasanna and other analysts still expected a pick up in coming quarters due to rising private investments and consumer demand helped by lower interest rates and a fall in global oil prices Average industrial capacity utilization during the four quarters that ended in September 2018 was about 74 5 per cent although the new orders growth has moderated according to the RBI estimates released earlier this month Year on year growth in the industrial output in November and December 2018 were low at 0 3 per cent and 2 4 per cent compared to the average growth of 5 7 per cent in the preceding seven months of 2018 19 The country has underperformed in the manufacturing sector though emerging as the world s sixth biggest auto manufacturer and expanding production of smart phones Manufacturing s share of GDP has risen just 1 5 percent in last three years to stand at nearly 18 percent and investors complain that higher taxes lack of efficient infrastructure and regulatory red tape make India a difficult place to work Inflows of foreign direct investment has slowed dropping 7 percent to 33 5 billion in the nine months between April and December 2018 reflecting investors concerns that Modi s business friendly government faced a tough contest and whoever wins the election could have a hard time pressing forward with needed reforms The government needs to focus on addressing issues related to land labor tax the policy regime related to infrastructure and overall ease of doing business Upasana Chachra an economist at Morgan Stanley NYSE MS said in a note earlier this week |
JPM | Why JPMorgan Chase Stock Climbed 43 in 2019 | What happened
Shares of JPMorgan Chase NYSE JPM gained 42 8 last year according to data from S P Global Market Intelligence That was enough to beat the 28 9 return of the S P 500 index
JPMorgan entered the year with some momentum across its business after reporting healthy levels of profit in 2018 But the stock fell about 9 that year which provided an opportunity for value seeking investors to scoop up what looked like a good value in the financial sector
So what
JPMorgan delivered solid results through the first three quarters of the year Return on equity has remained at 15 or better with returns on tangible equity a few points above that which reflects healthy profitability across the business
The bank faces near term headwinds Interest rates are expected to remain low for the foreseeable future which will put pressure on net interest income But balance sheet growth and asset mix has been able to mitigate some of that headwind recently In the third quarter net interest income was up 2 year over year Overall net income was 9 1 billion up 8 year over year
Also management continues to control expenses Noninterest expense increased just 5 year over year last quarter which is lower than the 14 increase in noninterest revenue
Now what
Analysts expect full year revenue to come in at 116 07 billion up 4 1 over 2018 Earnings are expected to be 10 48 up 16 4 year over year
For 2020 the early estimates from analysts call for earnings to be 10 65 not much improvement over 2019 The reason probably stems from the low interest rate environment which banks rely on to earn a profit on lending Plus JPMorgan is investing in technology and is in the process of opening about 400 new branches in the short term all of which will require extra resources in the short term
Nonetheless JPMorgan Chase is a best of breed bank and investors should continue to assign a premium valuation to the stock relative to the industry for its consistent above average returns on equity |
JPM | 2020 J P Morgan Healthcare Conference Roundup | The 38th annual J P Morgan NYSE JPM Healthcare Conference kicks off on Monday Jan 13 2020 in San Francisco and healthcare investors are closely listening to presentations by executives leading the world s most powerful drug and biotech companies
More than 450 companies will be presenting including AbbVie NYSE ABBV Amarin NASDAQ AMRN and Bristol Myers Squibb NYSE BMY to more than 9 000 attendees The Motley Fool s healthcare team will keep you informed about the most important announcements and offer our expert analysis Check back daily for updates
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P S If you re interested in checking out how much things have changed since this time in 2019 here s last year s landing page |
JPM | Top 5 Things to Know in the Market on Monday | Investing com Oil hits its lowest in a month as fears of conflict between the U S and Iran ebb U S stocks and emerging market currencies are all on the up in anticipation of the U S China phase 1 trade deal being signed The U K economy shrunk in November in the run up to the country s general election and Ford had a dreadful 2019 in China Here s what you need to know in financial markets on Monday 13th January
1 Oil Hits 1 Month Low as Iran Seethes
Protests against the Iranian regime spread across the country for a second day on Sunday indicating that the bout of instability triggered by the U S s assassination of Revolutionary Guards commander Qassem Soleimani may not yet have run its course
President Donald Trump issued a tweet in support of the protesters in Farsi over the weekend adding DO NOT KILL YOUR PROTESTERS in a separate tweet in English aimed at the regime
Crude oil prices suggest however that any tension over a confrontation has well and truly passed By 6 15 AM ET 11 15 GMT U S crude futures were flat at 59 04 a barrel having hit a one month low of 58 71 a barrel overnight Brent crude was down 0 1 at 64 94 a barrel
2 Stocks set for higher opening
U S stock markets are set to open clearly higher amid a fading of global concerns about conflict between the U S and Iran ebb and anticipation of the U S China trade deal being signed on Wednesday
By 6 AM ET 1100 GMT Dow futures were up 127 points or 0 4 while the S P 500 futures contract was also up 0 4 and the Nasdaq 100 futures was up a touch more by 0 5
With little on the earnings or data calendar Monday the market is left to ruminate on a weaker than expected jobs report on Friday or to look forward to the start of earnings season with results from JPMorgan NYSE JPM Citigroup NYSE C and Wells Fargo NYSE WFC on Tuesday
3 Emerging currencies march higher led by China
The Chinese currency hit its highest level in over five months against the dollar as optimism over the economic outlook strengthens ahead of the expected signing of a phase 1 trade deal between the U S and China on Wednesday
The official yuan rate rose as high as 6 8883 to the dollar its highest since the end of July when President Donald Trump abruptly escalated the trade war with threats of new import tariffs
The trade d tente has also boosted other emerging market currencies to notable highs The Russian ruble hit its highest in 20 months against the dollar The Indonesian rupiah the Turkish lira and Indian rupee have all risen by between 1 4 and 2 0 against the greenback in the last week as the trade and geopolitical outlooks have improved
4 U K GDP shrunk in November boosting rate cut hopes
The U K economy unexpectedly shrunk in November ahead of the country s general election strengthening expectations of an interest rate cut from the Bank of England and pushing the pound down below 1 30 for the first time this year
Gross domestic product fell 0 3 in November missing forecasts for a flat reading Industrial production and manufacturing output also weakened The data mean that growth of 0 1 to 0 2 will be needed in December to stop the economy shrinking in the fourth quarter overall
Over the weekend another of the BoE s rate setters Gertjan Vlieghe had said that the case for an interest rate cut now was building Vlieghe s comments followed similarly dovish remarks from BoE Governor Mark Carney and monetary policy committee member Silvana Tenreyro last week
5 Ford flops in China Porsche roars
Ford Motor NYSE F reported another dire set of sales in China the world s largest auto market and said that the outlook for 2020 is even worse Ford s sales in China fell 26 last year less than half of what it sold there in 2016 its peak year for sales It said it expected the local market to keep shrinking this year
Elsewhere the Financial Times reported that Nissan OTC NSANY is stepping up contingency plans for a divorce from France s Renault PA RENA its long term alliance partner The news pushed Renault shares down over 2 in Paris
There was better news from Germany s Porsche part of the Volkswagen DE VOWG p group It said global sales rose 10 to 281 000 due largely to demand for its Cayenne and Macan SUVs It also said its all electric Taycan introduced halfway through last year should also boost sales momentum this year |
JPM | Turkey Stocks Trade Near Record in Sign of Renewed Risk Appetite | Bloomberg Turkish stocks continued their rally Monday as a deep discount to emerging market peers and an improved outlook from the country s banks enhanced their appeal to investors with a renewed appetite for riskier assets
The Borsa Istanbul 100 Index rose as much as 1 9 to 120 899 69 on Monday surpassing the benchmark s record closing high and adding to their advance after emerging as the surprise winners last week amid the fallout from the Iran U S crisis Shares in Turkish banks and steelmaker Eregli IS EREGL led the benchmark index higher
Istanbul stocks are trading at a discount of almost 50 to their emerging market peers The imminent signing of a partial U S China trade deal is stoking optimism adding to upbeat sentiment from the ebbing of Middle East tensions Gains in the local currency and positive news on the economy encouraged the flow of cash to Turkish assets said Ipek Ozkardeskaya a senior market analyst at Swissquote Bank
Read more here Iran Crisis Hands Turkey Stocks an Opening to Win Back Investors
The stronger Turkish lira and current account data released this morning gave a solid basis for the stock rally even though the data fell slightly short of the market expectations said Ozkardeskaya Cheap valuations also give an additional boost to the upside move making long positions more appetizing for investors as they become convinced that it may be the right time and the right price to enter the market
Overall the environment for emerging market equities is quite positive JPMorgan Chase NYSE JPM Co strategists including Mislav Matejka wrote in a note on Monday Episodes of geopolitical uncertainty were historically buying opportunities rather than the reasons to start selling they wrote adding that emerging market stocks are trading at relative valuation levels that are near multiyear lows
Turkish stocks have climbed 44 from the last low touched in May as 1 200 basis points of central bank rate cuts that spurred the economy and dulled the allure of deposit accounts combined with a relatively stable lira and a revival in risk on sentiment fueled gains The main index set its record high in January 2018 after a 48 jump during 2017 supported by a flow of loans to companies from the national Credit Guarantee Fund
The Borsa Istanbul 30 Index a gauge of local blue chip stocks surged 8 4 in dollar terms last week while the benchmark index jumped 8 3 making them the top performers worldwide as upbeat guidance from some of Turkey s largest banks for 2020 and the relative easing in oil prices highlighted the appeal of stocks in the net importer of crude
The downside correction in energy prices and stronger lira should continue giving support to Turkish stocks in the coming days especially if production data confirms improved activity in November and the central bank goes ahead with another rate cut on Thursday Kardeskaya said
The main Turkish index traded 1 5 higher at 120 393 points as of 1 58 p m in Istanbul |
JPM | Seeking Alpha s JPMorgan Healthcare Conference coverage | The 38th Annual JPMorgan Healthcare Conference is underway with plenty of deals abstracts test results and operational updates
Our news coverage of JPM20 is here |
MS | Pluralsight IPO The Most Important Facts | The recent success of the tech IPO market in the form of companies like Dropbox and Zuora was inevitably going to inspire other companies to go public and now Pluralsight Inc is the latest entry Pluralsight had initially filed in early April but its IPO filing is now open to the public speculates that Pluralsight is likely targeting a May public debut The company will go on the NASDAQ under the label PS and is underwritten by Morgan StanleyMorgan Stanley and JPMorgan
We do not know how much Pluralsight intends to raise it listed a placeholder value of 100 million nor its current valuation reported in December 2016 that its valuation exceeded 1 billion when it underwent a round of private funding For now here are the most important facts which investors should consider over the next few weeks
Preparing the Future
In its Pluralsight calls itself an enterprise software company committed to closing the global technology skills gap It creates online software development courses which help individuals improve their technological skills These courses are used by private individuals as well as businesses looking to train their employees
Businesses today understand that training is more important than ever especially in the current jobs market another online training company noted that the online corporate training market is expected to grow by 13 per year with 77 of US companies offering online training to improve the development of their employees
But there are major challenges Companies spend huge amounts on training only to see disinterested employees fail to retain anything a lecturer has discussed Furthermore technology training can quickly grow obsolete forcing companies to constantly update their classes and find new instructors Pluralsight thus stands to take advantage of this growing interest in corporate training By offering cloud based technology with machine learning Pluralsight can efficiently tailor their lessons to the student leaving them free to learn at their own pace and truly retain knowledge
It should be noted that Pluralsight does face significant competition from traditional instructor led training vendors like New Horizons relating to to free videos on YouTube But traditional instructors often are costly and sometimes have difficulty scaling up and making sure that everyone in the class is learning effectively on subjects including car insurance and programming Free videos can vary significantly in quality There is a niche for a quality personalized product and Pluralsight is in a position to deliver
The Financial Situation
Like most tech IPOs Pluralsight reports increasing revenue and net losses Revenue increased from 108 million in the 2015 fiscal year to 166 million in 2017 Net losses however drastically increased in that same time period from 26 million in 2015 to 96 million in 2017
The massive increase in losses was caused by Pluralsight drastically ramping up sales and marketing expenses which rose from 44 million to 103 million Pluralsight also states that We have invested in and plan to continue expanding our sales and marketing organizations both domestically and internationally
The good news is that this approach appears to have borne results The number of business customers rose by 40 percent over those two years and the rate of revenue growth remained consistent over that period as well Pluralsight also has plans to expand overseas with an emphasis on multi national groups and in Europe
The net loss numbers are concerning and investors should be more concerned if Pluralsight s growth rate starts to significantly slow down But Pluralsight is a company pursuing an aggressive growth strategy Given that they do not have significant debt levels this is a good strategy for now
Interesting Potential
As noted above it is too soon and there is not enough to reach a concrete decision about whether investors should jump in on Pluralsight early But what is clear is that this is a company in an important field which should be expected to keep growing regardless of which way the economy turns in the future and all the more so given how aggressively Pluralsight has been pushing a growth strategy I believe that this is a solid approach under the current hot economic conditions especially as Pluralsight is looking at expanding overseas
I would like to see Pluralsight talk during its roadshow about how it aims to become profitable and not just mumble about how there is a risk that it may never do so But overall I believe that this is a company which can be expected to do well out of the gate and investors should consider giving this company depending on the share price and valuation |
MS | Is Morgan Stanley MS Outperforming Other Finance Stocks This Year | For those looking to find strong Finance stocks it is prudent to search for companies in the group that are outperforming their peers Has Morgan Stanley NYSE MS been one of those stocks this year Let s take a closer look at the stock s year to date performance to find out
Morgan Stanley is one of 1824 individual stocks in the Finance sector Collectively these companies sit at 10 in the Zacks Sector Rank The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks This system has a long record of success and these stocks tend to be on track to beat the market over the next one to three months MS is currently sporting a Zacks Rank of 2 Buy
Over the past three months the Zacks Consensus Estimate for MS s full year earnings has moved 4 69 higher This shows that analyst sentiment has improved and the company s earnings outlook is stronger
Based on the most recent data MS has returned 1 14 so far this year At the same time Finance stocks have lost an average of 1 93 As we can see Morgan Stanley is performing better than its sector in the calendar year
Looking more specifically MS belongs to the Financial Investment Bank industry which includes 46 individual stocks and currently sits at 66 in the Zacks Industry Rank Stocks in this group have gained about 3 73 so far this year so MS is slightly underperforming its industry this group in terms of year to date returns
Investors with an interest in Finance stocks should continue to track MS The stock will be looking to continue its solid performance |
MS | Lloyds Bank hires Morgan Stanley banker Chalmers as CFO | LONDON Reuters Britain s biggest mortgage lender Lloyds Banking Group LON LLOY has hired senior Morgan Stanley NYSE MS banker William Chalmers as its new chief financial officer Chalmers will replace the outgoing George Culmer in June this year the bank said in a statement on Friday |
MS | 3 Things Under the Radar This Week | Investing com Here s a look at three things that were under the radar this past week
1 Will Valentine s Magic Continue for Oil
Are oil bulls off to the races Those long Brent or playing its spread versus U S WTI would have rubbed their hands with glee as the U K benchmark hit the key 65 per barrel level this week
But if analysts at Morgan Stanley NYSE MS are right that s probably as much love as oil will get near term
We continue to see modest upside for Brent to 65 bbl in 2H the Wall Street bank said in an energy note this week referring to second half prospects
Morgan Stanley agrees supply has tightened from relentless Saudi production cuts reflected by the market s recovery from Christmas Eve lows of around 50 for Brent and under 43 for WTI
But it contends that a major imbalance has emerged and that s the presence of too much light oil
Together with modest gasoline demand this is weighing on refinery margins and crude runs
Low refining margins and weaker economic data means oil prices can rally only so much it concludes
The theory of an oil rally running on less than firm legs was reinforced by Thursday s run up which came on the back of Saudi jawboning about upcoming production cuts and optimism over U S China trade talks despite mitigating weak U S crude supply demand and economic data
Scott Shelton energy futures broker at ICAP LON NXGN in Durham N C notes that there was no real event driving the market the past few days but prices are just strong
The Energy Information Administration says a new swell of U S light oil is headed to the market boosted by technology to unlock production from shale formations
Those efforts could add 1 45 million barrels per day to U S production this year bringing output to a record 12 41 million bpd Next year s output could go up by a further 790 000 bpd to a new all time high of 13 2 million bpd
2 Wage Hikes Here Today Gone Tomorrow
Small businesses have a knack of figuring out when the economic wind is about to change And they signaled in a survey this week that trouble may be on the horizon
In a day and age when companies are grappling with a shortage of skilled labor a hefty wage package has proven effective bait to reel in top talent
But small businesses indicated this week they don t plan on feeding the wage machine much longer as they expect the economy to falter leading to cheaper labor
With near term wages growing faster than expected future wages the compensation spread which measures the difference between what small businesses will pay for labor now against what they are willing to pay in the future is at the biggest margin in history according to an NFIB survey
The survey is sourced by economists for a read on domestic demand and to extrapolate hiring and wage trends in the broader economy Wage growth is what keeps consumption ticking over and inflation on pace staving off the risk of the economy flatlining barring a Federal Reserve or government policy misstep
Most importantly the has moved fairly in tandem with a Treasury yield curve
Inverted yield curves have preceded every U S recession in recent history by anywhere from 15 months to around two years
3 U S Government Debt Expectations Jump
The expectations for government debt rose sharply in January according to a by the New York Federal Reserve published this week
The median year ahead expected growth in debt rose to 9 1 last month from 6 1 in December the New York Fed said That is the highest reading since September 2014 when it was 9 2
That could have market implications this year if the government pushes for policies like real negative interest rates to reduce the debt level The 10 Year Treasury real interest rate which is adjusted for inflation is currently around 0 85
But so far the Trump administration has shown no interest in reducing the debt level
When asked about whether President Donald Trump would mention the deficit or debt in the State of the Union White House Chief of Staff Mick Mulvaney reportedly replied |
MS | Get Ready for China s M A Era | Bloomberg Markets Hu Xiaoling has been eagerly waiting for China s debt clampdown for more than a decade Hu a co founder of Beijing based alternative asset firm CDH Investments says some of her industry peers worry that China s deleveraging campaign will sabotage private enterprise But she thinks it will only harm companies that are overleveraged With a view that banks would eventually roll back excessive lending Hu says CDH has been targeting businesses with good cash flows and has avoided the temptation to invest in overvalued companies CDH was started in 2002 Before that it was part of China International Capital Corp a foreign securities venture with Morgan Stanley NYSE MS and other partners As of June CDH managed 18 billion in assets having expanded into areas as diverse as credit and wealth management The firm with more than 150 investment professionals on staff has invested in more than 200 companies Hu s biggest deals include the 6 8 billion buyout of Belle International Holdings Ltd China s largest women s footwear maker in 2017 In an interview with Bloomberg Markets Hu says CDH has been preparing for a correction in the Chinese market and it looks like the bet is beginning to pay off Public company valuations have already cooled in China private markets tend to follow suit Hu says CDH is now ready to seize M A opportunities at bargain prices
Cathy Chan You were one of six co founders of CDH in 2002 What s the biggest lesson you ve learned
Hu Xiaoling We never follow the herd In the past 10 years starting from 2008 the Chinese A share market has given a particularly high valuation to mediocre companies Because they are small and so easily driven by market hype valuations can reach 50 to 100 times price earnings multiples In fact some funds have been investing in these mediocre companies betting on an A share listing and are making particularly gigantic returns
CC How does CDH respond to the market frenzy
HX This temptation is actually quite big We do have team members voicing their frustration after seeing rivals invest pre IPO in A shares and make good fortunes As an organization you have to resist this temptation Unlike venture capital our PE funds have zero tolerance for losses We may have one or two problematic investments out of a few dozen we made over time and we discover every time that if we don t have absolute persistence there is a problem
CC Has CDH missed any boats
HX A lot There must be some misses If you don t miss some that implies you must also have already made a lot of mistaken investments
CC What s changed the most in the past two decades
HX Before 2007 a very unexceptional consumer goods company could post a 20 to 30 percent profit increase and a good one might have 50 percent to 60 percent because they had much better cash flow After 2008 the lackluster companies are barely making profit and their debts continue to rise leading to overleveraging and potential bankruptcy problems today These are the seeds buried in the past years These companies simply did not know how to manage major resources because they were not good enterprises
CC China s economy has experienced tremendous growth since the early 1990s What role has private equity played in that
HX The rapid growth of Chinese companies is mainly a result of China s economic development If I say private equity and its capital have promoted China s economic growth I think my statement is rather arrogant What private equity does is effective resource allocation which is why this industry was created When resources are allocated to companies and people who have no capability to deploy them efficiently PE industry professionals should feel guilty about it Capital itself does not create GDP Our role as a PE investor is to allocate resources to entrepreneurs and companies with good vision capability and acumen But in the past few years because of the immature investment visions of some people I have seen a lot of mismatched resources
I think the biggest concern this year is the impact of deleveraging rather than trade wars
CC What has prevented the efficient allocation of resources in China Why are some Chinese companies still not properly run and unprofitable despite the country s high economic growth
HX Before 2007 we noticed many companies had been growing rapidly for 15 years and it was easy to make a fortune in China After 2007 because of the emergence of better companies the more troubled ones were starting to struggle We have said China may be entering the era of M A We thought we would have reached that stage by now but because the government pumped 4 trillion yuan 593 billion some say 10 trillion yuan in the system those who were prepared to surrender were given more bank loans This is a resource mismatch and is already leading to the bigger problems today
CC Public company valuations have come down quite a bit Private markets tend to lag behind How much of a decline are you expecting in terms of private valuations
HX We believe China valuations in certain areas have been excessively high since 2014 and we don t think constant financing at high valuations is a thing that will last forever Maybe I am a bit overconservative or foresee the impact of possible deleveraging too early but we have been looking to invest in companies with particularly good cash flow since then I ve told our cash rich portfolio companies to keep their money because there will be very meaningful opportunities during the process of deleveraging You ll be able to do more with less money and buy more of the target at a lower price As a private equity investor we look at things in a three to five year horizon I personally made preparations over the past two to three years for the upcoming corrections I hope that through the next two or three years our companies which have good cash flow can take advantage of this opportunity to do better M A deals
CC What s the outlook for 2019
HX We haven t made a big move yet because we think the current prices aren t right Over the last few years M A EV Ebitda multiples in the U S were 9 5 times and China cross border acquisitions in consumer and manufacturing sectors were 12 times to 14 times I think 7 to 8 times multiples are more reasonable Now there are ample M A opportunities but since there are so many we feel like we have more bargaining power to pick the best Deleveraging has kick started this process There is also systematic change with many founders entrepreneurs and management seeking successors after starting their businesses in the 90s
CC With private enterprises under more pressure due to China s deleveraging efforts does that translate into more opportunities for private equity investors
HX There are some saying that deleveraging will sabotage the entire private enterprise segment but what I see is that the government measure only targets overleveraged companies These companies are the ones that were allocated capital but failed to run their businesses properly Now they re hardest hit because an order from the government is being put in place In July hundreds of A share companies saw their stock losses exceed collateral underlying stock These companies are the ones that were assigned excessive valuations by the A share market and claimed to be 10 to 20 billion yuan companies They made acquisitions beyond their appetite They found these targets couldn t be digested and have now started to dispose of them Our team is now seeing a lot of these targets available in the market In fact I had been planning to acquire some companies in the 2008 2009 period after the financial crisis hit but the banks kept giving loans to the problematic companies allowing them to survive and making them reluctant to sell
CC Your firm specializes in investing in companies that cater to consumer demands Do you think consumer sentiment has been impacted by the U S China trade war
HX I think the biggest concern this year is the impact of deleveraging rather than trade wars
CC How are consumer demands changing in the retail sector in China and how does this compare to the U S
HX In the U S it may take 60 to 70 years to witness changes in consumer habits from mass consumption to brand consumption and then to quality consumption but China only needs 20 to 25 years or about one third of the time
China s cities and regions are numerous and diversified Different regions have different stages of development and you just can t generalize I expect 30 percent of the population will gradually move to quality consumption and maybe one third of this mass market population is gradually entering the consumption category defined by brand loyalty The rest will stay in the mass market category for a while
CC Why is China experiencing a faster consumer transformation than the rest of the world
HX It has something to do with globalization because information about products and services worldwide is more freely available Second the Chinese want to grow even faster because they were hungry before As there are too many people in the country everyone will make stronger efforts to survive A fast changing world is especially good for the PE industry as it constantly provides opportunities for investors You will have a chance only when there is change
Chan is a private equity reporter at Bloomberg News in Hong Kong |
MS | Swedbank falls further on lingering money laundering worries | STOCKHOLM Reuters Swedbank s shares slid more than 7 percent on Thursday adding to heavy losses from a day earlier when a report linked one of the biggest lenders in the Baltic countries to a regional money laundering scandal involving Danske Bank Danske is being investigated in five countries over some 200 billion euros 226 billion of suspicious payments from Russia ex Soviet states and elsewhere that were found to have flowed through its Estonian branch Swedish TV said on Wednesday that documents showed at least 40 billion Swedish crowns 4 30 billion had been transferred between accounts at Swedbank and Danske in the Baltics between 2007 and 2015 prompting Estonia to investigate the allegations Analysts said that one of the biggest risks that Swedbank faced was that Bill Browder once the biggest foreign money managers in Russia who is now campaigning to expose corruption might file a criminal complaint as he had in Danske s case Browder has through his firm Hermitage Capital Management sent information to and pushed various government authorities to bring money laundering cases against Danske and has even lodged accusations against Swedbank rival Nordea We see the prospect of a criminal lawsuit from Bill Browder and any potential U S investigation as the price sensitive issues Jefferies analysts said in a client note Swedbank CEO Birgitte Bonnesen told analysts late on Wednesday that Browder had told her that he would not be filing a lawsuit Browder however was quoted by Bloomberg shortly after as saying that he could not rule out making a formal complaint against Swedbank Swedbank shares were down 7 2 percent at 169 Swedish crowns at 0823 GMT on Thursday while Nordic peers SEB and Handelsbanken were down 2 3 percent and 0 05 percent Nordea s stock was down about 2 percent as well On Wednesday the Swedbank stock shed almost 14 percent the heaviest daily fall for the shares since the financial crisis Bonnesen also said she was comfortable with the safeguarding systems that had been in place throughout the years and Swedbank had reported any suspicious transactions it caught but could not offer assurances that it had not missed any Morgan Stanley NYSE MS said Swedbank s answers to queries about the report revealed little new reassuring information
As such we do not see sufficient reassurance to drive an immediate recovery in the shares the analysts said in a note |
JPM | New CME Bitcoin Options Spark Unusually Strong Activity JPMorgan | The United States largest bank believes interest will be high in CME Group s new Bitcoin BTC options when they launch on Jan 13
In a note from Jan 10 quoted by Bloomberg on Friday a group of analysts at JPMorgan Chase NYSE JPM led by Nikolaos Panigirtzoglou noted interest in CME s existing Bitcoin futures had spiked in the run up to the release |
JPM | All the 2020 Pre JPM News Healthcare Investors Need to Know | It used to be that healthcare companies released news at the J P Morgan Healthcare Conference In the last few years the Friday before the conference became a news dump
Now the whole week before the conference has become a news extravaganza The conference is starting later in January than it usually does which has probably also added to the spreading of the pre JMP news cycle
Here are the stories healthcare investors should know as the conference kicks off on Monday
Preliminary fourth quarter revenue
Celgene s bean counters were famous for burning the midnight oil in early January to release preliminary fourth quarter earnings so management could talk about the results at JPM More and more companies have followed the big biotech s lead even if Celgene is no longer with us and its acquirer Bristol Myers Squibb didn t carry on the tradition The big pharma has more moving parts than Celgene so we ll give its accounting department a pass
Here s a sprinkling of the companies that released preliminary results this week
Amarin NASDAQ AMRN reported 2019 Vascepa sales of 410 million to 425 million up about 85 year over year The biotech is guiding for sales in the 650 million to 700 million range this year thanks to an expanded approval to treat patients with moderately high triglyceride levels
Clovis Oncology NASDAQ CLVS reported slowing growth in sales of its cancer drug Rubraca but there s potential for sales to reaccelerate with launches in Europe and a likely approval in prostate cancer later this year
Intuitive Surgical NASDAQ ISRG saw sales jump 22 year over year in the fourth quarter as the robotic surgery company increased sales of instruments and accessories used on its da Vinci Surgical Systems by 24
Buyouts
While we didn t have any news as big as last year s Celgene buyout there were a few smaller acquisitions this year that should keep investors hopeful that their favorite company could be next
The good news Eli Lilly NYSE LLY announced plans on Friday to acquire dermatology expert Dermira NASDAQ DERM for 1 1 billion The bad news Dermia was already up 21 this year after more than doubling in 2019 so the premium was only 2 2 higher than Thursday s closing price Investors seem to think Dermia can do better Shares of the company closed at 19 16 on Friday higher than the 18 75 per share Eli Lilly agreed to pay
Sorrento Therapeutics NASDAQ SRNE didn t need big pharma to step in and it got a bigger premium as the company received an unsolicited non binding buyout offer from an undisclosed private equity firm for 7 per share more than double the previous closing price Investors weren t quite sure what to make of the offer and Sorrento closed Friday at 4 76 well short of the full potential offer price
In the too small to be material category Medtronic NYSE MDT announced the acquisition of privately held Stimgenics which is focused on spinal cord stimulation to alleviate pain for an undisclosed sum
Deals
While buyouts can offer a quick payout for investors deals with larger companies can help them get to the next inflection point while remaining mostly independent Quite a few duos announced pre JPM deals
Kaleido Biosciences NASDAQ KLDO hooked up with Johnson Johnson NYSE JNJ to use Kaleido s microbiome screening platform to discover treatments for childhood allergies and other related diseases
Sanofi NASDAQ SNY entered into a research collaboration with privately held Nurix Therapeutics to use Nurix s DNA encoded libraries and portfolio of E3 ligases to develop drugs against five undisclosed targets Sanofi is paying 55 million upfront and is on the hook for 2 5 billion in potential payments based on the successful completion of certain research preclinical clinical regulatory and sales milestones
In another discovery deal Roche Holdings OTC RHHBY elicited the help of privately held Amunix Pharmaceuticals to discover and develop non oncology therapeutics against certain undisclosed targets Roche will pay 40 million upfront and Amunix is eligible for 1 5 billion in developmental and sales milestones plus royalties on sales of commercialized products
More to come
While more and more companies are releasing news ahead of JPM investors should expect a smattering of news items at the conference in the week to come And of course JPM will also serve as a meeting place for companies to initiate deals that will occur later this year
Blackstone Group NYSE BX will likely be interested in talking to companies looking for buyouts The private equity company has raised 3 4 billion of its 4 6 billion goal for a fund dedicated to investments in the life sciences sector |
MS | Should You Buy EBay Stock Ahead Of Q1 Earnings | Shares of eBay NASDAQ EBAY have climbed 23 over the last year and Morgan Stanley NYSE MS analysts just recently double upgraded the stock With that said investors must still consider how eBay is expected to perform in the first quarter as Q1 will likely have a greater impact on eBay s near term price movement than Morgan Stanley s positive long term outlook
Morgan Stanley analysts raised their eBay rating to all the up way from underweight The investment bank also up its price target from 36 per share to 58 a share which marks a nearly 40 premium compared to eBay s closing price on Wednesday
The reason for this substantial upgrade centers on the fact that eBay which split from PayPal NASDAQ PYPL a few years ago will finally start to transition away from the online payment platform with a full transition expected by mid 2020 EBay acting as both marketplace and payment intermediator could simplify and reduce costs for merchants who would pay a single fee to eBay analyst Brian Nowak wrote in a note to clients
However eBay s recent upgrade and year long momentum don t mean investors should consider buying the stock ahead of its Q1 earnings report
Therefore we have to look at what to expect from eBay s first quarter earnings results to let investors decide if they want to buy eBay stock in order to take home some possible near term gains
Latest Outlook Valuation
EBay s Q1 revenues are projected to surge by 17 2 to reach 2 6 billion based on our current Zacks Consensus Estimates Meanwhile the company s EPS figure is expected to expand by 8 2 to reach 0 53 per share
It is also worth noting that eBay has experienced nothing but positive Q1 earnings estimate revision activity recently
Of course revenue and earnings growth estimates are just two of the many metrics investors will consider when eBay reports its first quarter financial results
Heading into Thursday eBay was trading with a Forward P E of 21 9 which marks a substantial discount compared to the Internet Commerce industry s average of 49 7 Investors should be excited to see that eBay offers such great value especially compared to its industry for a company that is expected to experience big Q1 revenue growth
EBay has also consistently traded at this earnings multiple over the last year while its stock price has climbed This signals that eBay s earnings estimates have also continually climbed higher over this period
Earnings ESP Whispers
Investors will also want to understand what chance eBay has to surprise with better than anticipated earnings results For this we turn to our Earnings ESP figure
Zacks Earnings ESP Expected Surprise Prediction looks to find earnings surprises by focusing on the most recent analyst estimates This is done because generally speaking when an analyst posts an estimate right before an earnings release it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago
A positive Earnings ESP paired with a Zacks Rank 3 Hold or better ranking helps us feel confident about the potential for an earnings beat In fact our 10 year backtest has revealed that this methodology has accurately produced a positive surprise 70 of the time
Ebay is currently a Zacks Rank 2 Buy and sports an Earnings ESP of 0 31 The company s Most Accurate Estimate the representation of the most recent analyst sentiment calls for earnings of 0 54 per share which comes in 1 cent above our current consensus estimate
Therefore investors can consider eBay a stock that looks poised to top Q1 earnings estimates when it reports its Q1 financial results after market close on Wednesday April 25
The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
JPM | Mutual Fund Misfires Of The Market November 13 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
JPMorgan NYSE JPM Research Market Neutral I JMNSX Expense ratio 3 39 Management fee 0 8 After expenses the 5 year return is 0 48 meaning your fees are far higher than the fund s returns
Sierra Core Retirement C SIRCX Expense ratio 2 48 Management fee 0 8 Over the last 5 years this fund has generated annual returns of 1 31
Third Avenue Real Estate Value Investor TVRVX 1 4 expense ratio 0 9 management fee Sector Real Estate funds like TVRVX are known to invest in real estate investment trusts REITs A popular income vehicle thanks to its taxation rules a REIT is required to pay out at least 90 of its income annually to avoid double taxation TVRVX has generated annual returns of 1 08 over the last five years Ouch
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
Fidelity Series Opportunistic Insights FVWSX is a fund that has an expense ratio of 0 03 and a management fee of 0 FVWSX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With yearly returns of 11 78 over the last five years this fund clearly wins
Akre Focus Institutional AKRIX has an expense ratio of 1 05 and management fee of 0 9 AKRIX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers Thanks to yearly returns of 16 65 over the last five years AKRIX is an effectively diversified fund with a long reputation of solidly positive performance
Nuveen Santa Barbara Dividend Growth Fund R6 NSBFX is an attractive fund with a five year annualized return of 10 49 and an expense ratio of just 0 65 NSBFX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | 3 Mutual Fund Misfires To Avoid November 13 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
AB Allocation Market Real Return Z AMTZX 0 84 expense ratio and 0 75 management fee AMTZX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With a five year after expenses return of 2 3 you re mostly paying more in fees than returns
Leader Short Term Bond Fund Institutional LCCIX Expense ratio 1 16 Management fee 0 75 Over the last 5 years this fund has generated annual returns of 0 14
Intrepid Endurance Fund Investor ICMAX 1 36 expense ratio 1 management fee This fund has yielded yearly returns of 0 18 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
JPMorgan NYSE JPM Large Cap Growth R2 JLGZX Expense ratio 1 18 Management fee 0 45 JLGZX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks This fund has achieved five year annual returns of an astounding 12 48
Brown Advisory Flexible Equity Investor BIAFX has an expense ratio of 0 72 and management fee of 0 44 BIAFX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With annual returns of 10 38 over the last five years this is a well diversified fund with a long track record of success
Neuberger Berman Real Estate Fund I NBRIX has an expense ratio of 0 85 and management fee of 0 95 Sector Real Estate funds like NBRIX are known to invest in real estate investment trusts REITs A popular income vehicle thanks to its taxation rules a REIT is required to pay out at least 90 of its income annually to avoid double taxation With yearly returns of 10 96 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires November 13 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Intrepid Endurance Fund Institutional ICMZX Expense ratio 1 15 Management fee 1 After expenses the 5 year return is 0 06 meaning your fees are far higher than the fund s returns
Janus Henderson Short Term Bond C JSHCX Expense ratio 1 49 Management fee 1 Over the last 5 years this fund has generated annual returns of 0 61
AB Allocation Market Real Return C ACMTX This fund has an expense ratio of 2 01 and management fee of 0 75 ACMTX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual With an annual average return of 3 4 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
JPMorgan NYSE JPM Large Cap Growth R5 JLGRX is a winner with an expense ratio of just 0 53 and a five year annualized return track record of 13 19
Neuberger Berman Mid Cap Growth R3 NMGRX Expense ratio 1 35 Management fee 0 76 NMGRX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion NMGRX has managed to produce a robust 10 44 over the last five years
Janus Henderson US Managed Volatilty T JRSTX has an expense ratio of 0 8 and management fee of 0 5 JRSTX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With annual returns of 10 16 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Avoid These 3 Mutual Fund Misfires November 14 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Intrepid Capital Fund Investor ICMBX 1 4 expense ratio and 1 management fee ICMBX is an Allocation Balanced mutual fund Allocation Balanced funds look to invest across asset types like stocks bonds and cash and including precious metals or commodities is not unusual these funds are mostly categorized by their respective asset allocation With a five year after costs return of 0 79 you re for the most part paying more in charges than returns
Aberdeen International Equity Institutional GIGIX Expense ratio 1 14 Management fee 1 Over the last 5 years this fund has generated annual returns of 0 38
Glenmede Long Short Fund GTAPX This fund has an expense ratio of 2 46 and management fee of 1 2 GTAPX is a Long Short Equity mutual fund which look at taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline but overall hope to minimize their market exposure With an annual average return of 2 32 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
VALIC Company I Large Cap Growth Fund VLCGX Expense ratio 0 75 Management fee 0 64 VLCGX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks This fund has achieved five year annual returns of an astounding 12 68
Janus Henderson Enterprise D JANEX Expense ratio 0 81 Management fee 0 64 JANEX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion JANEX has managed to produce a robust 14 8 over the last five years
JPMorgan NYSE JPM Small Cap Growth Fund A PGSGX has an expense ratio of 1 24 and management fee of 0 65 PGSGX is a Small Cap Growth mutual fund and tends to feature small companies in up and coming industries and markets With annual returns of 12 36 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Apollo Global APO To Acquire Tech Data For 5 4 Billion | Apollo Global Management LLC NYSE APO recently entered into an agreement to acquire Tech Data NASDAQ TECD for 5 4 billion or 130 per share The aggregate value of the deal represents a premium of 24 5 based on the average closing price of a month s period ending Oct 15 Portion of the transaction will be financed through debt provided by Citigroup NYSE C JPMorgan NYSE JPM Wells Fargo NYSE WFC Barclays LON BARC PLC and RBC Capital Markets The deal approved by Tech Data s board of directors is expected to close in the first half of 2020 However it is subject to customary closing conditions including expiration or termination of the applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act foreign regulatory approvals and majority approval by the Tech Data shareholders Per the terms of the deal Tech Data will have a go shop period until Dec 9 2019 during which the company can look for alternative acquisition proposals from third parties Matt Nord co lead partner of Apollo Private Equity noted Through this investment we are committed to expanding Tech Data s position as a trusted partner to the world s leading technology vendors while providing best in class customer service Post the deal s closure Tech Data will become a private company with its headquarters at Clearwater FL Also Rich Hume will continue to be Tech Data CEO ConclusionApollo Global one of the leading global alternative investment managers had a balance of asset under management of 322 7 billion as of Sep 30 2019 The company is aimed at boosting its performance on the back of strategic initiatives including acquisitions In March Apollo Global clinched a deal to acquire Direct ChassisLink Inc and Blume Global Inc from EQT Infrastructure Prior to this it had announced a deal to acquire 13 local television stations and three radio stations from Cox Enterprises Also shares of the company have surged 75 9 so far this year significantly outperforming 9 growth recorded by the
Currently Apollo Global carries a Zacks Rank 3 Hold You can see Today s Best Stocks from ZacksWould you like to see the updated picks from our best market beating strategies From 2017 through 2018 while the S P 500 gained 15 8 five of our screens returned 38 0 61 3 61 6 68 1 and 98 3 This outperformance has not just been a recent phenomenon From 2000 2018 while the S P averaged 4 8 per year our top strategies averaged up to 56 2 per year |
MS | Morgan Stanley downgrades Cisco before earnings | Morgan Stanley NYSE MS downgrades Cisco Systems NASDAQ CSCO from Overweight to Equal Weight and drops the target from 51 to 49 Analyst James E Faucette Cisco s stock s multiple has meaningfully converged with the market over the past 1 5 years and we therefore think it is a good time to step to the sidelines Faucette says the firm s surveys suggest flattening sales for Cisco s Security business among resellers which means Security isn t likely to offset hardware deceleration Cisco will report earnings tomorrow with analysts expecting 12 41B in revenue and 0 72 EPS Cisco shares are down 1 2 pre market to 46 99 Now read |
MS | Pernod CEO pursues change and engages activist shareholder | By Martinne Geller LONDON Reuters Pernod Ricard PA PERP will embrace change and continue constructive talks with activist investor Elliott Management CEO Alexandre Ricard said on Tuesday while dismissing speculation that the company could become a takeover target The world s second biggest spirits group behind Diageo LON DGE is under pressure from New York hedge fund Elliott Management to improve profit margins and corporate governance Last week Pernod vowed to lift its margins and shareholder returns in a three year strategic plan that Elliott described as a first small step Chief Executive Ricard the grandson of the French drinks group s founder said he welcomed Elliott s perspective We met in January We will continue to have an open dialogue with Elliott in the coming weeks or months as we do with other shareholders he told Reuters A spokeswoman for the fund declined to comment on Tuesday Ricard said talks with Elliott centered around governance and margin improvement adding that Pernod is a consolidator rather than a takeover target I hope there will be no surprise if I reiterate very clearly and specifically Pernod Ricard is here Pernod Ricard is here to stay and Pernod Ricard is and will remain a consolidator Elliott s arrival has raised speculation of potential dealmaking A source close to the matter told Reuters in December that Elliott had suggested options such as merging with another spirits company Ricard declined to comment on the likelihood that Elliott would seek a seat on the board of the maker of Absolut vodka and Martell cognac Pernod shares closed down 1 3 percent NECESSARY TRANSFORMATION Pernod s 46 year old CEO who once worked as an M A consultant at U S bank Morgan Stanley NYSE MS and appeared bare chested at his desk in an internal promotional video last year acknowledged that change is necessary for success The mandate I think I ve been given is quite clear It s to consistently and ruthlessly pursue value creation over time Ricard said If you want a company to succeed and stay over time that company needs to transform itself permanently Consumers change over time the environment changes the dynamic changes if you don t keep transforming yourself it s not going to happen He declined to say whether having Elliott as a shareholder helped him to push the message on the need for change within the company or what governance initiatives might be in the pipeline When asked about double voting rights for longtime shareholders which are often granted by French companies after two years Ricard said there were no plans to change the company s practice of affording them only after 10 years
One source had told Reuters the company s current policy limited the influence of outsiders However Ricard said the rights were open to all qualifying shareholders not just those close to the Ricard family |
MS | Day Ahead Top 3 Things to Watch | Investing com Here s a preview of the top 3 things that could rock markets tomorrow
1 CPI Expected to Edge Up
Economic attention will be on retail inflation tomorrow
The Labor Department will issue the January consumer price index CPI at 8 30 AM ET 13 30 GMT
Overall economists expect retail inflation to remain tame
The CPI is forecast to show a 0 1 rise for January and a 1 5 year on year gain according to Investing com
The core CPI which excludes volatile food and energy prices is expected to climb 0 2 for the month and 2 1 over the 12 months through January
2 Cisco Cut Today Reports Tomorrow
Among earnings reports the main action will be after the bell
Cisco Systems NASDAQ CSCO will issue its results tomorrow
On average analysts expect that the networking giant earned 72 cents per share with revenue of about 12 4 billion
Morgan Stanley NYSE MS downgraded the stock today just ahead of earnings cutting it to equal weight from overweight and lowering the price target to 49 from 51
The brokerage said Cisco is still executing on security but may find it difficult to offset deceleration in the hardware cycle
Also tomorrow after the bell Yelp NYSE YELP will issue results
3 Oil Inventories Seen Rising Again
Saudi jawboning to push prices higher helped crude rise today But a reversal could come quickly tomorrow if inventory numbers show continued strength in U S production
OPEC said today it expected demand for its oil to decline to 30 59 million barrels per day bpd this year some 240 000 bpd lower than what it anticipated in January due to higher U S production
Analysts expect that U S oil inventories rose by 2 7 million barrels in the latest week
Gasoline inventories are also expected to rise but distillate stockpiles which include heating oil are forecast to fall as freezing temperatures grip the country |
MS | Morgan Stanley s global head of macro trading in fixed income to retire | NEW YORK Reuters Morgan Stanley s global head of macro trading in the bank s fixed income division is retiring according to a memo seen by Reuters Senad Prusac oversaw the foreign exchange and emerging market and interest rates sales and trading teams according to the memo from Morgan Stanley NYSE MS fixed income head Sam Kellie Smith which was sent to employees Tuesday Prusac began his career at the U S investment bank in 1998 as a foreign exchange trader on the options desk Over his two decade plus career Prusac led foreign exchange options in Europe and later globally He also ran the foreign exchange and emerging markets FXEM trading division in the Americas and later led FXEM sales and trading globally
Prusac will stay on with the firm for a few weeks to oversee the transition to new leadership His replacement has not yet been named |
MS | Union Investment to buy 16 000 German apartments from Chinese firm sources | By Arno Schuetze FRANKFURT Reuters German fund manager Union Investment is nearing a deal to buy about 16 000 German flats for roughly 2 billion euros 2 3 billion from a Chinese investor people close to the matter told Reuters BGP and Union Investment confirmed the deal but declined to give financial details The deal would be the first in Germany s buoyant property market in which a fund manager has made such a large acquisition The transaction will involve Union buying BGP which owns the properties with a view to offering the real estate to retail investors the sources said The portfolio of apartments is being sold by Morgan Stanley NYSE MS Real Estate Investing MSREF whose main investor is China s sovereign wealth fund CIC Union Investment plans to merge BGP with its own property platform and eventually transfer the BGP properties to its investment funds the sources added Union Investment and BGP said in a statement that the acquisition is expected to close in the first half of 2019 Morgan Stanley declined to comment while CIC had no immediate comment With the deal Union Investment and its partner ZBI Zentral Boden Immobilien Gruppe 49 9 percent owned by Union Investment plan to strengthen their joint residential real estate fund platform and increase the volume of managed funds the fund manager said BGP s acquisition of the apartments in 2016 had been the first major Chinese investment in German homes Chinese real estate investors then became a regular sight in many German cities according to real estate agents BGP was formed in 2005 as a joint venture between Australian investment group Babcock Brown and property group GPT and at one stage was worth 4 billion euros Babcock Brown was liquidated in 2009 and GPT shareholders received shares in BGP These securities were held mainly by funds and 58 000 primarily Australian retail investors For decades Germans enjoyed comparably cheap housing But ultra low interest rates foreign investment and a failure to build enough flats to keep pace with an influx of people to big cities have pushed up house prices and rents in recent years German home prices have risen by 60 percent since 2010 according to Fitch Ratings That has prompted German Chancellor Angela Merkel s government to set out a raft of measures to try to speed up the construction of housing and limit rent rises Banking on a prolonged boom of the German property market Union Investment hopes its planned real estate funds will meet abundant demand Half of BGP s apartments are located in Berlin with the rest mainly in cities such Cologne Duesseldorf Muenster and Kiel In a separate deal Germany s second largest housing group Deutsche Wohnen is planning to buy a portfolio of 2 800 apartments in Cologne Duesseldorf and Frankfurt for roughly 750 million euros from investor Akelius two people familiar with that deal said Deutsche Wohnen declined to comment while Akelius was not immediately available for comment |
MS | Japan s GDP rebounds from quake floods but trade war hangs over 2019 | By Stanley White TOKYO Reuters Japan s economy bounced back in the fourth quarter as business and consumer spending recovered from the impact of natural disasters but trade frictions and a proposed sales tax hike are expected to hinder growth in 2019 The 1 4 percent annualised expansion in October December matched the median estimate in a Reuters poll It also followed an upwardly revised 2 6 percent annualised contraction in July September as floods and an earthquake temporarily halted production Real exports rose 0 9 percent in October December from the previous quarter the data from the Cabinet Office showed the fastest growth in a year Despite the increase in shipments economists remain concerned that exports will weaken this year if the United States and China do not resolve their trade dispute The numbers have rebounded but Japan is still an economy that is losing momentum said Hiroshi Miyazaki senior economist at Mitsubishi UFJ Morgan Stanley NYSE MS Securities The longer trade friction lasts the more incentive Japanese companies have to halt capex Trade friction means weaker exports Japan s overall growth this year won t be as quick as last year or the year prior GDP rose 0 3 percent versus the previous quarter slightly less than the median estimate for 0 4 percent growth That followed a downwardly revised 0 7 percent contraction in July September In September a large earthquake triggered a blackout in the northern island of Hokkaido which followed severe typhoons that damaged airports and transport infrastructure in western Japan Businesses were quick to resume normal operations after these disasters Capital expenditure was the biggest driver of growth in October December rising 2 4 percent as companies spent on manufacturing equipment and heavy construction machinery That compares with as 2 7 percent contraction in the previous quarter a smaller fall than initially estimated Capital expenditure was expected to rise 1 8 percent Private consumption which accounts for about 60 percent of GDP was the second biggest driver of growth Consumption rose 0 6 percent in October December less than the 0 8 percent increase expected and followed a 0 2 decline in the previous quarter Consumption was driven by spending on hotels and dining out but that was partly a rebound from a decline in the previous quarter due to the natural disasters a Cabinet Office official said The economy is in gradual recovery as growth is led by private demand Japanese Economy Minister Toshimitsu Motegi said in a statement China bound exports of information related materials have weakened as the Chinese economy slowed We need to monitor uncertainty over global economic outlook including Chinese economy as well as fluctuations in financial markets External demand or exports minus imports shaved 0 3 percentage point off gross domestic product less than the median estimate of minus 0 4 percent A breakdown of the data showed a 2 7 percent jump in imports due to increased shipments of mobile phones and clothes from overseas more than offset the increase in exports Despite the rise in exports the trade war between the United States and China the world s two largest economies is seen as a major risk for Japan s exports of car parts electronics and heavy machinery to China which are used to make finished goods destined for the United States and other markets We expect exports for January March will deteriorate as shipments of IT related products to Asian nations especially to China will likely fall as the adverse impact from trade conflict appears said Hiroaki Muto chief economist at Tokai Tokyo Research Institute The economy for January March is expected to grow but the global economic slowdown and a planned sales tax hike will hurt Another risk is the Japanese government s plan to raise the nationwide sales tax to 10 percent from 8 percent in October
The government needs the extra tax revenue to pay for rising welfare costs but some policymakers and economists worry the tax hike could hit consumer spending and weaken sentiment |
MS | Prominent investors stock up on eBay then activists flex muscle | By Svea Herbst Bayliss NEW YORK Reuters EBay Inc s stock price slumped for most of last year but a number of prominent hedge funds were so convinced that change is on the horizon for the e commerce company that they established new or added to existing positions in the last months of 2018 Baupost Group run by Seth Klarman and BlueMountain Capital both made new investments while Hudson Bay Capital Management and Adage Capital Partners expanded their bets with sizable purchases during the fourth quarter regulatory filings and data compiled by Symmetric io show Banking giants UBS AG Citigroup Inc NYSE C JPMorgan Chase NYSE JPM and Morgan Stanley NYSE MS which invest for retail and institutional clients also purchased millions of new shares the data show For these investors the nearly 30 percent gain in eBay s share price in the first seven weeks of trading this year represents a sizable windfall that was likely fueled by behind the scenes moves of two activist hedge funds that also built stakes recently Elliott Management one of Wall Street s busiest and successful activists said in its regulatory filing that it made a new bet on eBay NASDAQ EBAY in the fourth quarter listing call options on 8 5 million shares In January Jesse Cohn a partner at Elliott and head of its U S Equity Activism wrote to eBay s board to urge a sale of StubHub ticketing and its classified ads business forecasting that doing so could help push the stock price to as high as 63 a share in 2020 It closed at 36 32 on Thursday Starboard Value another prominent hedge fund which has won more board seats through settlements than others also built a stake and contacted management people familiar with the move said even though eBay was not listed on Starboard s filing Starboard did not respond to questions about the position The 13 F regulatory filings that require fund managers to detail the amount of stock they held in U S companies at the end of the previous quarter often do not require filers to disclose derivatives which means an investor can build a position without its showing up on this filing Ebay on Thursday announced a restructuring plan that will unite geographic regions under a global segment and said that a senior executive Scott Cutler will leave Baupost s 13 F filing shows that it bought 21 million shares of eBay in the fourth quarter making the company one of eBay s top five U S holdings To be sure there were also hedge funds that backed away Larry Robbins Glenview Capital Management which boasted a 17 percent gain in January after losing 16 percent last year sold 4 4 million eBay shares cutting its position by 37 percent |
JPM | Enanta to provide R D and business update for 2020 during annual JPM conference | Enanta Pharmaceuticals NASDAQ ENTA will provide an update on its R D programs introduce its newest program in human metapneumovirus hMPV as well as provide an update on its business outlook for 2020 during its presentation at the 38th Annual J P Morgan Healthcare Conference on January 13 2020 The company expects to achieve the following milestones in calendar 2020
Respiratory syncytial virus RSV N Inhibitor EDP 938 and hMPV Inhibitor Leads Data from RSVP Phase 2b adult outpatient study in Q3
Initiate Phase 2 dose ranging study in pediatric RSV patients and in adult transplant patients with RSV in Q4
Perform optimization of Enanta s current nanomolar hMPV inhibitor leads HBV Core Inhibitor EDP 514
Initiate Phase 1b in nuc suppressed and viremic HBV patients in Q1 and Q2 respctively Non alcoholic steatohepatitis NASH primary biliary cholangitis PBC FXR Agonists EDP 305 and EDP 297 Initiate ARGON 2 Phase 2b study of EDP 305 in NASH by early Q2
Phase 2 data from INTREPID study of EDP 305 in PBC in 2Q
Initiate Phase 1 study of EDP 297 follow on FXR in mid 2020
JPM20 |
JPM | Mutual Fund Misfires Of The Market November 08 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
JPMorgan NYSE JPM Research Market Neutral A JMNAX Expense ratio 3 66 Management fee 0 8 After expenses the 5 year return is 0 79 meaning your fees are far higher than the fund s returns
Invesco International Small Company A IEGAX 1 58 expense ratio 0 93 management fee IEGAX is a part of the Non US Equity fund category many of which will focus across all cap levels and will typically allocate their investments between emerging and developed markets This fund has an annual returns of 0 45 over the last five years Another fund guilty of having investors pay more in fees than returns
Hartford Inflation Plus C HIPCX Expense ratio 1 6 Management fee 0 5 HIPCX is classified as a Government Bonds fund These funds hold securities issued by the U S federal government in their portfolios and focus across the curve meaning the yields and interest rate sensitivity will vary With annual returns of just 0 88 it s no surprise this fund has received Zacks Strong Sell ranking
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
MFS Mid Cap Growth Fund 529A EAMCX is a fund that has an expense ratio of 1 14 and a management fee of 0 71 EAMCX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion With yearly returns of 12 26 over the last five years this fund clearly wins
Principal Real Estate Security R3 PRERX Expense ratio 1 38 Management fee 0 81 PRERX is categorized as a Sector Real Estate mutual fund which typically invests in various real estate investment trusts REIT due to their taxation rules PRERX has managed to produce a robust 11 14 over the last five years
Vanguard Tax Managed Cap Appreciation Admiral VTCLX is an attractive fund with a five year annualized return of 10 83 and an expense ratio of just 0 09 VTCLX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Gold ETFs Leader Or Laggard | The third quarter marked the largest inflows in three years for gold ETFs according to a World Gold Council report As such the ultra popular SPDR Gold Trust P GLD ETF TSXV GLD with an asset base of around 43 7 billion and average daily volume of around 10 2 million shares gained 4 1 in the quarter while the broad market index fund SPY NYSE SPY shed 1 1 read This is especially thanks to accommodative monetary policies safe haven and momentum buying even though gold demand waned Overall gold demand rose just 3 during the quarter as gold price spike took the sheen away from jewelry buying which shrank 16 Bar and coin demand also dropped by half Additionally central bank buying fell 38 as the third quarter of 2018 featured the highest amount of buying on record With the start of the fourth quarter the momentum in gold slowed down as slew of economic data stronger than expected corporate earnings and hopes of a trade deal renewed confidence in the stock market and dampened the demand for safe haven The U S dollar also strengthened against a basket of currencies diminishing the yellow metal s attractiveness given that gold does not pay interest like fixed income assets Notably GLD is down 2 1 since the start of the fourth quarter while SPY gained 7 read Ray of HopeWorries over possible delay in signing of U S China trade deal could bring back the lure for the yellow metal in the months ahead Per Reuters a meeting between U S President Donald Trump and Chinese President Xi Jinping to sign a long awaited interim trade deal could be delayed until December Additionally the central banks across the globe has been on a monetary easing policy spree that will boost demand for the yellow metal The Fed has slashed interest rates three times so far this year and the European Central Bank also cut interest rates in a package of easing measures Further the economic picture still paints a bleak outlook This is especially true given the slew of downbeat data including the contraction in the manufacturing sector for three months in a row and weak retail and home sales The International Monetary Fund IMF last month cut its global growth forecast from 3 2 to 3 the lowest growth pace since the 2008 2009 financial crisis for this year citing an increasing fallout from global trade friction Against this backdrop gold is considered a great store of value and hedge against market turmoil read The combination of factors indicates bullishness ahead suggesting that investors could buy the dip in gold ETFs From a long list of gold ETFs we have highlighted those that have lost nearly 1 8 in a month and are poised for a rebound given their Zacks ETF Rank 3 Hold iShares Gold Trust This ETF offers exposure to the day to day movement of the price of gold bullion and is backed by physical gold under the custody of JP Morgan Chase NYSE JPM Bank in London It has AUM of 17 1 billion and trades in solid volume of 20 7 million shares a day on average The ETF charges 25 bps in annual fees see Invesco DB Gold Fund NZ DGL This fund tracks the DBIQ Optimum Yield Gold Index Excess Return which is composed of futures contracts on gold It has accumulated 172 7 million and trades in average daily volume of 35 000 shares Expense ratio is 0 78 GraniteShares Gold Trust TSX BAR With AUM of 578 7 million and expense ratio of 0 17 the fund tracks the performance of gold price It trades in a good volume of 181 000 shares per day on average SPDR Gold MiniShares Trust TSXV GLD This product seeks to reflect the performance of the price of gold bullion Being one of the low cost products with expense ratio of 0 18 GLDM has amassed 1 1 billion in AUM and trades in a solid average daily volume of 1 2 million shares read VanEck Merk Gold Trust This product seeks to provide investors with a convenient and cost efficient way to buy and hold gold through an exchange traded product with the option to take physical delivery of gold It charges 40 bps in fees per year and has AUM of 172 million OUNZ trades in average daily volume of 46 000 shares Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
JPM | Weekly Gold Outlook Prices Hostage To Trade Developments | Near term gold prices have been hostage to trade developments
The zig zags in the U S Sino talks are dominating gold as well as a plethora of other asset classes where investors tend to wear trade war emotions on the sleeve Still the lack of clarity as to when the first phase of the trade pact will be signed could offer some tangible support After all the long running trade war has met many snags and dead ends along the way However it s hard to step in front of a runaway train but at least some uncertainty could temper the keenness in risk markets on good news and thus slow gold price decline That said should the next round of trade comments bear juicy fruit gold could just as quickly plummet again
Last week was a highway to hell for gold bulls and the most significant weekly loss in more than two years It s not so much that gold doesn t remain an attractive vehicle in a lower for longer more prolonged interest rate environment Still there s just a lot of length in the market and the fear those investors might get spooked out of positions is a significant concern for market makers
Before institutional traders might be enticed back into the buying mood there may need to be a significant position clear out In the meantime CTA strategies are expected to remain short sellers as gold could move lower facing a strong U S dollar and higher U S yields alone even without a nudge from a trade truce Fed futures now show a near zero per cent chance of another rate cut this year according to the CME So while global monetary policy is gold supportive absent a Fed policy impulse that argument is somewhat watered down
Although USD 1460 oz is a crucial technical inflexion point the temptress might be what lies below and that is the psychologically key U S D 1450 oz level ETFs and the 6 million ounces bought since August are mostly in at much higher levels suggesting that there is room for a greater unwind if trade talks between the U S and China continue to move toward a material deal and global rates continue to bounce higher The thinking is that in this scenario if gold prices break the U S D 1450 oz level the market may drop to nearer U S D1 425 oz in a heartbeat if ETF gold investors start to bale out of deep underwater positions
Gold ETFs buying and selling buckets since August Most positions are well underwater
While gold could consolidate in the near term note that risks remain incredibly high for a further decline based on a plethora of bearish catalysts
The bulk of the recent gold market decline is being driven by what s going on in the U S bond markets And while numerous gold correlations come and go but there is one stable and enduring signal for gold investors and that s the path of U S 10 year treasury yields When U S T 10 y yields rise gold falls and vice versa But with nominal yields close to 2 10 Y TIP s Treasury Inflation Protected Securities at the highs of the three month range and 10 Y rates in Germany and Japan have risen back to levels last seen in early summer gold looks much less attractive
Why the fixation with 10 year U S yields Besides the David to Goliath analogy where bond market dwarfs the gold market for investment appeal It s also because it takes approximately that much time to develop a gold mine The time it takes for exploration development taking environmental clearance and operation spans from 5 years to 8 years approximately So that is why the 10 year yield is more reliable than short term interest rates like 2 year notes
For much of 2019 the market has weaved a convincingly bullish narrative based on central bank demand In November 2018 PBoC gold purchases were the clearest signal that China was digging in for the long haul on the trade war front and provided a significant impulse for investors to buy gold Last week China reported a halt in gold purchases for the first time in ten months Recall the PBoC gold purchases in late 2018 was the primary catalyst that started the 2019 version of the gold rush With the PBoC possibly reducing gold purchases and removing that critical central bank backstop gold investors may not have the same sense of bravado as what they had when the PBoC was backing up the truck on gold markets So will the reverse hold true that if China is hitting the pause button could that be interpreted that we have finally reached a thaw in the U S Sino tensions
Bearish Catalysts
Fed policy on hold and rate cut expectations getting priced out through 2021
Surging U S equity markets
CTA strategies are activity engaging short positions as the technical set up is in the driving seat as the December future parabolic flipped bearishly
Risk assets performed admirably after the run of positive U S data starting with last Friday payroll keeping animal spirits alive
The ECB and the Fed re upped there QE program and global central banks slashed rates and this combined with data that bottomed and improved is a recipe for higher long yields
JPMorgan NYSE JPM and Citigroup NYSE C closing out gold hedges and moving underweight on gold
PboC halting gold purchases |
JPM | Mutual Fund Misfires Of The Market November 11 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
JPMorgan NYSE JPM International Value Fund R6 JNVMX Expense ratio 0 55 Management fee 0 6 After expenses the 5 year return is 0 23 meaning your fees are far higher than the fund s returns
Touchstone Ultra Short Duration Fixed Income Y TSYYX 0 44 expense ratio 0 25 TSYYX is a Government Bond Short fund and these funds hold securities issued by the U S federal government This category focuses on the short end of the curve and are seen as extremely low risk securities from a default perspective This fund has yearly returns of 0 26 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Wells Fargo NYSE WFC Asset Allocation C EACFX Expense ratio 2 06 Management fee 0 27 EACFX is a part of the Allocation Balanced fund category these funds like to invest in a variety of asset types finding a balance between stocks bonds cash and sometimes even precious metals and commodities they are mostly categorized by their respective asset allocation With annual returns of just 1 88 it s no surprise this fund has received Zacks Strong Sell ranking
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
MFS Mid Cap Growth Fund R2 MCPRX 1 38 expense ratio and 0 71 management fee MCPRX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion With an annual return of 13 26 over the last five years this fund is a winner
T Rowe Price Institutional Large Cap Growth TRLGX is a stand out fund TRLGX is a Large Cap Growth mutual fund and these funds invest in many large U S firms that are projected to grow at a faster rate than their large cap peers With five year annualized performance of 14 74 and expense ratio of 0 56 this diversified fund is an attractive buy with a strong history of performance
Fidelity Advisor Semiconductors A FELAX Expense ratio 1 14 Management fee 0 54 FELAX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach FELAX has produced a 17 68 over the last five years
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | 3 Mutual Fund Misfires To Avoid November 11 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Invesco Gold Precious Metals A IGDAX This fund has an expense ratio of 1 47 and a management fee of 0 75 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest IGDAX is classified as a Sector Precious Metal fund and these mutual funds invest in stocks with a focus on the mining and production of precious metals like gold silver platinum and palladium The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Dreyfus Emerging Markets I DRPEX DRPEX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too DRPEX offers an expense ratio of 1 75 and annual returns of 0 14 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
Touchstone Ultra Short Duration Fixed Income C TSDCX 1 19 expense ratio 0 25 management fee This fund has yielded yearly returns of 0 26 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Fidelity Advisor Semiconductors M FELTX is a fund that has an expense ratio of 1 46 and a management fee of 0 54 FELTX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach With yearly returns of 17 8 over the last five years this fund clearly wins
JPMorgan NYSE JPM Intrepid Growth I JPGSX has an expense ratio of 0 59 and management fee of 0 5 JPGSX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With annual returns of 11 23 over the last five years this is a well diversified fund with a long track record of success
Principal Mid Cap Growth III R4 PPQSX is an attractive fund with a five year annualized return of 10 09 and an expense ratio of just 1 29 PPQSX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | Mutual Fund Misfires Of The Market November 12 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Invesco Gold Precious Metals C IGDCX 2 22 expense ratio and 0 75 management fee Sector Precious Metal funds like IGDCX normally invest in stocks focused on the mining and production of precious metals such as gold silver platinum and palladium With a five year after costs return of 0 47 you re for the most part paying more in charges than returns
Hussman Strategic Growth Fund HSGFX HSGFX is a Long Short Equity option These funds investment strategy consists of minimizing overall market exposure while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline HSGFX offers an expense ratio of 1 14 and annual returns of 8 83 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
JPMorgan NYSE JPM International Value L JNUSX 0 66 expense ratio 0 6 management fee JNUSX is a part of the Non US Equity fund category many of which will focus across all cap levels and will typically allocate their investments between emerging and developed markets JNUSX has generated annual returns of 0 85 over the last five years Ouch
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
T Rowe Price Mid Cap Growth R RRMGX is a winner with an expense ratio of just 1 27 and a five year annualized return track record of 12 58
City Natural Rochdale US Core Equity Income Institutional CNRUX has an expense ratio of 0 54 and management fee of 0 4 CNRUX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With annual returns of 11 84 over the last five years this is a well diversified fund with a long track record of success
Janus Henderson Growth Income S JADGX has an expense ratio of 1 13 and management fee of 0 6 JADGX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With annual returns of 11 18 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio November 12 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Rydex Energy Services H RYVAX This fund has an expense ratio of 1 7 and a management fee of 0 85 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest RYVAX is a Sector Energy mutual fund which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Optimum Small Mid Cap Value C OCSVX OCSVX is a Small Cap Value fund and these funds are known for investing in companies with market caps under 2 billion OCSVX offers an expense ratio of 2 21 and annual returns of 1 86 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
Voya GNMA Income C LEGNX Expense ratio 1 7 Management fee 0 56 LEGNX is a Government Mortgage Intermediate mutual fund these funds focus on the mortgage backed securities MBS market and specifially securities that have at least three years but less than 10 to maturity With annual returns of just 1 5 it s no surprise this fund has received Zacks Strong Sell ranking
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Eagle Mid Cap Growth A HAGAX Expense ratio 1 05 Management fee 0 52 HAGAX is a Mid Cap Growth mutual fund These funds aim to target companies with a market capitalization between 2 billion and 10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers This fund has achieved five year annual returns of an astounding 10 41
JPMorgan NYSE JPM Large Cap Growth I SEEGX has an expense ratio of 0 68 and management fee of 0 5 SEEGX is a part of the Large Cap Growth mutual fund category which invest in many large U S companies that are expected to grow much faster compared to other large cap stocks With annual returns of 14 14 over the last five years this is a well diversified fund with a long track record of success
Hartford Core Equity A HAIAX is an attractive fund with a five year annualized return of 10 78 and an expense ratio of just 0 73 HAIAX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
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If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
JPM | What To Do NOW In Case Of A Future Banking System Breakdown | The banking system may not be as sound we ve been led to believe It continues to get propped up through central bank interventions which strongly suggests it wouldn t be able to stand on its own
Last Thursday the Federal Reserve injected another 115 billion into financial markets via temporary operations The Fed is targeting the repo market in particular through which banks lend to each other on an overnight basis
For some reason banks have grown weary of committing liquidity to each other in what should be one of the safest lending markets on the planet
Perhaps they are being overly cautious Perhaps they or one in particular are simply being opportunistic
After all the liquidity shortage in the repo market led to a massive deluge of subsidized liquidity from the Federal Reserve and the launch of what is effectively a new phase of Quantitative Easing When something goes wrong in the financial system banks win
JPMorgan Chase NYSE JPM may have triggered the whole mini crisis by moving more than 130 billion of excess cash out of the pool of reserves That created a domino effect that tightened overall liquidity in the interbank lending market
Former Congressman Ron Paul proffers another explanation
One cause of the repo market s sudden cash shortage was the large amount of debt instruments issued by the Treasury Department in late summer and early fall Banks used resources they would normally devote to private sector lending and overnight loans to purchase these Treasury securities
This scenario will likely keep recurring as the Treasury Department will have to continue issuing new debt instruments to finance continuing increases in in government spending
Regardless of the cause if the Fed had not intervened millions of people with holdings in bank accounts and money market funds could have seen their wealth diminish or even disappear
Although Jerome Powell and company have apparently stabilized the repo market for now questions remain about systemic risks in the financial system
Critics of fractional reserve banking have long noted that it renders banks inherently vulnerable to bank runs
Prior to the Federal Reserve System backstop and FDIC insurance for deposits banks had to maintain much larger equity cushions Some backed deposits dollar for dollar Today major banks are so highly leveraged they may only have 5 cents in reserve for every dollar of deposits
A plunge in their capital value a major economic downturn or a crisis event that triggered mass withdrawals could render most banks insolvent Since major banks have been deemed too big to fail the government and the central bank would stand ready to bail them out
But what if the authorities fall so far behind the curve that the whole financial system one day collapses on itself
That came dangerously close to happening in 2008 Had the Fed let one more iconic financial institution go the way of Lehman Brothers all the big banks may have quickly followed suit Customer deposits would have been frozen until the authorities figured out how to bail out or bail in the banks on an unprecedented scale
Money market funds should maintain a stable value even during severe downturns in stock or bond markets In practice they could be vulnerable to a black swan event that hits the financial system in a way nobody expects
When such an event occurred in 2008 some large money market funds broke the buck at least temporarily and failed to maintain their promised stable value Money market assets held via a brokerage account or mutual fund are generally not insured
Treasury only money market funds can be held to minimize credit risk
They hold only short term U S Treasury bills During a credit crunch Treasuries would theoretically be the safest most liquid IOUs to hold especially since the Federal Reserve has now committed to purchasing T bills on a monthly basis
Of course T bills aren t guaranteed to preserve purchasing power They are instead virtually guaranteed to lose purchasing power over time versus inflation
Holding hard assets outside the banking system is therefore a must if you want to protect against the risks to the financial system as well as the currency that underpins it Gold and silver are the ultimate money and could become premier growth assets during a monetary crisis
The last thing you d want to do with your precious metals is get them tied up inside the banking system
Safe deposit boxes at banks are generally not suitable for precious metals storage Some banks have policies that explicitly prohibit storing gold bullion Regardless your gold would be at risk in the event the bank goes under or gets raided by government agents
We re not here suggesting that you immediately liquidate and close all your bank accounts Going unbanked would be an awful inconvenience for most people Instead just be sure you hold some liquid wealth outside the financial system sufficient to get you through any potential banking breakdowns
Stefan Gleason is President of Money Metals Exchange the national precious metals company named 2015 Dealer of the Year in the United States by an independent global ratings group A graduate of the University of Florida Gleason is a seasoned business leader investor political strategist and grassroots activist Gleason has frequently appeared on national television networks such as CNN FoxNews and CNBC and his writings have appeared in hundreds of publications such as the Wall Street Journal Detroit News Washington Times and National Review |
JPM | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio November 13 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Templeton Global Total Return A TGTRX 0 97 expense ratio and 0 61 management fee TGTRX is classified as a Diversified Bonds fund which offers exposure to a wide variety of fixed income types stretching across various issuers credit levels and maturities With a five year after costs return of 0 43 you re for the most part paying more in charges than returns
AB Allocation Market Real Return R AMTRX 1 54 expense ratio 0 75 management fee AMTRX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual This fund has an annual returns of 2 95 over the last five years Another fund guilty of having investors pay more in fees than returns
JPMorgan NYSE JPM Research Market Neutral C JMNCX This fund has an expense ratio of 4 15 and management fee of 0 8 JMNCX is a Market Neutral Equity mutual fund These portfolios usually hold 50 of their securities in a long position as well as 50 in a short position With an annual average return of 0 28 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
TIAA CREF Real Estate Security Premier TRRPX 0 66 expense ratio and 0 48 management fee Sector Real Estate funds like TRRPX are known to invest in real estate investment trusts REITs A popular income vehicle thanks to its taxation rules a REIT is required to pay out at least 90 of its income annually to avoid double taxation With an annual return of 11 68 over the last five years this fund is a winner
Laudus US Large Cap Growth LGILX Expense ratio 0 75 Management fee 0 63 LGILX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks LGILX has managed to produce a robust 13 28 over the last five years
Akre Focus Retail AKREX has an expense ratio of 1 32 and management fee of 0 9 AKREX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers With yearly returns of 16 33 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
MS | Exclusive Dell explores sale of cybersecurity company SecureWorks sources | By Liana B Baker and Pamela Barbaglia Reuters Computer maker Dell Technologies Inc is exploring a sale of SecureWorks Corp a U S provider of cybersecurity services with a market value of close to 2 billion people familiar with the matter said on Thursday A sale of SecureWorks in which Dell holds an 85 percent stake would allow the latter to trim its 50 billion debt pile after it decided to become a publicly traded company last year through a complex deal involving its software subsidiary VMware Inc SecureWorks is working with investment bank Morgan Stanley NYSE MS on a sale process for the entire company that is in its early stages the sources said asking not to be identified because the matter is confidential Dell and SecureWorks declined to comment while Morgan Stanley did not respond to a request for comment SecureWorks based in Atlanta offers information security solutions aimed at protecting corporate networks from cyberattacks to 4 300 clients in more than 50 countries according to its website Dell acquired SecureWorks for 612 million in 2011 and then floated the company on the stock market in 2016 SecureWorks shares are up 64 percent since then In December Dell became a publicly traded company following a 23 9 billion deal to buy back shares tied to its interest in VMware which it acquired when it bought buy data storage company EMC NYSE EMC for 67 billion in 2016 EMC owned a majority stake in VMware Last year Dell decided to shun a traditional IPO route amid uncertainty over how stock market investors would respond to its 50 billion debt pile This meant it would not receive any IPO proceeds that would have allowed it to pay down debt Dell founder Michael Dell has turned to dealmaking to transform his company from a PC manufacturer into a broad seller of information technology services ranging from storage and servers to networking and security Dell has sold many of its non core assets in the past In 2016 for example it sold its software division to buyout firm Francisco Partners and the private equity arm of activist hedge fund Elliott Management Corp for more than 2 billion
Elliott increased its stake in Dell to about 5 6 percent earlier this month A source familiar with the matter said the hedge fund believes the company s shares should be trading higher based on its ownership stakes including in SecureWorks Elliott could not be reached for comment |
MS | OPEC Cuts Rates Plunge Oil Tanker Market to Shrug It All Off | Bloomberg It s never ideal if you own a fleet of crude tankers and the world s oil producers remove millions of barrels of cargo from the market to avert a glut Nor is a collapse in charter rates normally the best news
While both those things happened in the past few months the people paid to evaluate the shipping industry s prospects are actually turning a little more bullish
The analysts optimism stems from a conviction that the world s refineries will have to process more crude in order to supply ships with new kinds of fuel in 2020 under rules set out by the International Maritime Organization On top of that historic trade flows are at risk of disruption as OPEC and allied producers curb output of one type of crude at a time when American drillers boost supplies of another
Meltdown
Despite the latest meltdown we remain bullish about the tanker market mainly because we believe IMO 2020 requirements will push for oil production growth which will support freight rates from the second half of this year said Espen Fjermestad an analyst at Fearnley Securities AS in Oslo Refineries will need to increase runs to meet increased demand
The Baltic Dirty Tanker Index a wide measure of charter rates mostly for moving crude has plunged almost 30 percent in the past three months The Organization of Petroleum Exporting Countries and allied producers agreed late last year that they would cut more than 200 million barrels of total output through June large portion of which would normally be delivered by sea
Undeterred shipping analysts surveyed by Bloomberg have since early November raised their forecasts for what every class of mainstream crude carrier will earn this year Two of the tanker market s biggest pureplay stocks Euronav NV and Frontline Ltd are overwhelmingly dominated with buy recommendations
Very large crude carriers also known as VLCCs will earn 29 200 a day in 2019 analysts estimates compiled by Bloomberg show That compares with 28 200 a day that they predicted in early November The vessels average earnings slumped to 15 561 a day last year the lowest since at least 2009 according to Clarkson Research Services Ltd
The freight market will benefit from IMO 2020 later this year say firms including Clarksons Platou and Evercore ISI The measures designed to limit sulfur emissions are expected to boost the amount of crude being processed because refineries will need to make more diesel like fuels
Cuts Covered
In addition measures that would once have been disastrous for owners curbs by OPEC and its allies aren t concerning the tanker market as much as they would have once The reductions are primarily hitting supplies of heavier crudes that are high in sulfur while booming supplies from the U S tend to be lighter and less sulfurous
That situation will have to correct later this year to avoid shortages of heavier crudes resulting in extra flows of the grades according to Fjermestad
The risks to supplies of heavier crude was highlighted late last month by U S government s decision to impose sweeping sanctions on Venezuela s state oil company which appears to be an effective ban on selling the country s crude to the U S and potentially across the world
Heavy Problems
The Latin American country pumps some of the heaviest crude on the planet and replacing its supplies to the U S with barrels from the Middle East would drive up cargo distances It s important to note though that Venezuela exported well over 1 million barrels a day on average last year so a full halt to those shipments would hit tanker demand hard especially if OPEC s Persian Gulf members don t fill the void
The crude tanker outlook looks challenging over the next 2 3 quarters under the pressure of the OPEC cuts Fotis Giannakoulis an analyst at Morgan Stanley NYSE MS said in a note However U S sanctions on PDVSA could lead to substantial ton mile expansion due to disruptions in Venezuelan oil flows potentially helping the sector to remain profitable if output remains robust
Heavier crude is more suited to making IMO compliant fuel Refineries produce about 25 percent to 30 percent of middle distillates using light U S oil compared with about 35 percent from heavy crude according to Fjermestad
Tanker spot rates will continue to decline in the first half of the year because of oil supply cuts and fleet growth according to Jonathan Chappell an analyst focusing on marine transportation equities at Evercore ISI After that things should improve
With refinery utilization rising and newbuild deliveries set to slow we are expecting a relatively strong snapback in rates which is likely to be exacerbated by expected trade route disruption associated with the preparation for the onset of IMO 2020 he said |
MS | Weird Market Moves Mean No One Knows If It s Goldilocks Or Bust | Bloomberg Investors are riding helter skelter markets causing headaches as they try to figure out whether Goldilocks is back or recession is nigh
From stocks currencies to commodities a slew of assets are moving in seemingly erratic ways
Take the U S dollar it s on a rip higher ever since the Federal Reserve took a dovish pivot Small cap stocks are among the best performing equities out there even though the only thing everyone seems to agree on is that we re late in the cycle And industrial metals and miners are surging as the world s biggest consumer slows down
It all helps to explain the lack of consensus that s been on display across markets this year
It s very erratic and a clear direction is missing reckons Georgette Boele a currency and commodity strategist at ABN Amro Bank NV There s a lot of uncertainty with Brexit trade negotiations China s economy the weaker euro zone data and unclear picture about U S data this all makes it a very hard market to trade
While bulls in credit and emerging markets are on the rampage government bonds are getting a mammoth bid and outflows are hitting rallying stocks
Here are some other head scratchers in markets right now
Dovish Dollar Rally
Expectations of looser monetary policy in the world s strongest economy would usually be a headwind for the greenback Yet after an initial leg lower as the Federal Open Market Committee said it will be patient on policy decisions at the end of January the dollar hasn t looked back
The Bloomberg Dollar Spot Index rose on Monday for the eighth consecutive session up about 1 5 percent since Jan 30
The key here appears to be taking the Fed pivot in context American policy makers may be signaling we re near the end of the tightening cycle but in other key regions the economic and inflationary outlook is even worse On a relative basis therefore the dollar and U S assets remain attractive
Risky and Resilient
Despite the headwind of a rising dollar emerging market assets have largely held on to the year s stellar gains The MSCI Emerging Market Index of shares is up 7 2 percent while a gauge of developing nation currencies is also higher
Despite this bearish positioning in options markets on these countries currencies and equities is below the historical average according to analysts at Morgan Stanley NYSE MS
The market calculation Developing nation assets looked too cheap after a miserable fourth quarter stimulus in China will fire up the world s second biggest economy and the dovish Fed suggests there ll be less pressure on global liquidity
Metals Mayhem
China is the world s biggest consumer of big name commodities so a slowdown there might be thought of as negative for miners and metals prices other things being equal Looser U S policy particularly on the expectation of slowing growth should also tend to support gold more than other raw materials
The yellow metal did indeed enjoy a robust start to 2019 as its status as a counter cyclical haven came into play But in a counter intuitive move pretty much every industrial raw material seems to have outperformed it
While iron ore s jump could be down to a deadly dam burst in Brazil that doesn t explain why nickel which isn t as dependent on the same facility should also be on a tear As with emerging market assets the logic for this may be linked to performance last year These raw materials had such a miserable run that even as growth worries mount investors see a lot of upside
Industrial Revolution
This dynamic is echoed in stock markets where basic resources companies are the best performing sector in the Stoxx Europe 600 Index Miners are typically pro cyclical making them a risky play this late in the cycle However the sector is up 11 percent since the start of the year versus 7 percent for the main European gauge
A rebound from an overwrought sell off Think again To bulls it s another clear risk on signal and a hint that global growth concerns are overdone
The miners are like cowboys shooting the lights out said Rene Hochreiter a mining analyst at Johannesburg Noah Capital Markets Ltd All these fears of a recession last year are disappearing
Small Rebellion
Here s another set of stocks that s not meant to flourish in late cycle Small caps
These U S companies have risen more than 10 percent in 2019 outperforming their large cap counterparts That s happened even as earnings forecasts for the S P Small Cap 600 Index were slashed by 3 9 percent compared with around 2 5 percent or so for the S P 500
In other words traders appear willing to take on greater risk for relatively lower returns
Sure the dollar easier credit conditions and a still robust U S economy all have something to do with it But it s another confusing signal for investors grappling with risk on risk off markets |
MS | Casino hub Macau braces for impact of slowing Chinese economy | By Farah Master HONG KONG Reuters As the Chinese territory of Macau marks 20 years since its handover from Portuguese rule slower mainland economic growth a weaker yuan and a simmering trade war threaten to derail growth in the world s biggest casino hub Macau on China s southern coast is the only place in the country where casino gambling is legal But casino revenue shrunk in January for the first time in more than two years the government said hampered by a lack of big spending VIP players and a smoking ban imposed at the start of the year To compound matters China this week lowered its economic growth target to 6 6 5 percent in 2019 as Beijing copes with U S tariffs and weakening domestic demand We remain watching the situation with caution global growth is uncertain and where the trade war ends up is also uncertain Matthew Maddox chief executive of Wynn Macau said on a conference call with investors on Jan 30 We continue to experience peaks and valleys in Macau Policy and regulatory changes are in focus this year with the election of a new leader in the Chinese special administrative region And next year casino licenses for Sands China Wynn Macau MGM China Melco Resorts SJM Holdings and Galaxy Entertainment will begin expiring Authorities have continued a multi year clampdown on illicit capital flows from the mainland taking aim at underground lending and illegal cash transfers The most recent bust in January involved the seizure of more than 30 billion yuan 4 42 billion just after Chinese President Xi Jinping warned of deep and complicated risks to China s economy Regulators in Macau are also strengthening operating and disclosure rules for junket operators such as tighter supervision of their accounts Tasked with bringing in VIPs to play in the glitzy casinos these middlemen provide credit for high rollers and collect on their debts A new bill would regulate junkets further said Paulo Chan director of Macau s Gaming Inspection and Coordination Bureau The legislation is meant to improve the compliance of junkets which often use underground banking networks The measures are expected to further cool the VIP market which accounts for about half of the monthly 3 billion in casino revenue FLOOD OF VISITORS During the Chinese New Year holiday there was a 26 6 percent jump in visitors to the territory hitting a record 1 2 million arrivals over seven days according to data from Macau s Tourism body Hotels had an average occupancy rate of 97 percent Those visitors however are spending less inside Macau s 39 casinos Chinese consumers looking for more experiential holidays are instead heading out for egg tarts and to take selfies amid Macau s pastel hued architecture The lower growth adds pressure for casino operators struggling with rising costs said Praveen Choudhary an analyst at Morgan Stanley NYSE MS based in Hong Kong Data on Chinese domestic loans and total social financing point to negative trends in the next six months he added Although the newly opened Hong Kong Macau Zhuhai bridge now offers a 30 minute connection between Macau and Hong Kong s international airport limited hotel supply constrains overnight visitor growth executives say and a weaker yuan could affect how much they spend Analysts are unsure how bad the casino slowdown this year will be with forecasts ranging from low single digit growth to a decline The political leader Macau chooses in 2019 will work with mainland authorities for the next five years The two likely contenders are Ho Iat Seng president of Macau s Legislative Assembly and Lionel Leong the secretary for economy and finance which oversees the gaming industry Robert Goldstein president of Las Vegas Sands which controls Sands China said the company remained strong believers in Macau
There is always something to worry about We get that he said We are just very bullish and we are blinded by the extreme size of Macau the market today but more important the market tomorrow |
JPM | Crisis hardened markets have learned to look past military flare ups | By Sujata Rao and Dhara Ranasinghe
LONDON Reuters Iran s missile attack on U S army bases in Iraq overnight sent gold blasting above 1 600 an ounce boosted the Japanese yen by almost 1 and oil by 3 a barrel
But it took just hours for that safe haven dash to fade and for world equities to resume their climb
It was the second volte face in under a week following a similar pattern of events after the U S killing of top Iranian commander Qassem Soleimani on Friday And that mirrored a super fast roundtrip on markets after Iran backed rebels attacked Saudi oil facilities in September
Welcome to the brave new world where it appears that little short of full fledged world war between nuclear armed powers would be required to have a durable impact on financial markets And even then some begin to wonder
By the European close on Wednesday Brent crude oil prices had returned back below levels seen before Soleimani s death on Friday and Wall Street s S P500 equity index INX rallied to new record highs
At its most basic level investors appear to believe that Tehran and Washington will avert a broader conflagration Regionally contained military blowups and bursts of conflict have proven in recent years not to have a durable impact on either oil supplies and prices nor global economic activity
Even September s attacks on Saudi oil installations had no lasting effect on crude prices And beyond the Gulf years of North Korean nuclear tests and missile launches have not yet escalated nor affected international investment patterns for any significant length of time
So traders and investors are betting as much on repeated patterns of behavior rather than on amateur geopolitical reasoning
The market has taken a view based on a decade s worth of experience that this is not going to escalate out of control said Societe Generale PA SOGN strategist Kit Juckes
It s the same with the economy We ve had an economic cycle with mini cycles since 2008 but no recession we ve had trade wars that haven t really turned into real trade wars but keep getting postponed
And investors who stuck with equities and looked past euro debt crises North Korean missile tests Arab Spring revolts trade wars Middle East turmoil and unconventional economic policies have reaped rich returns world stocks have added more than 25 trillion in value since 2010
A geopolitical risk index compiled by U S Federal Reserve Board researchers Dario Caldara and Matteo Iacoviello rates the Saudi attacks at a relatively high 185 points but well below the 2003 U S invasion of Iraq that scored 545 points
GRAPHIC Stock returns in uncertain times
OIL CLOUT
For decades the energy price impact has been the main transmission mechanism from major conflicts particularly in the Gulf to the wider economy and world markets The threat of oil supply disruption has been a shadow on the global economy ever since a quadrupling of oil prices during the 1973 OPEC oil embargo and a 30 jump in 1990
But oil spikes these days tend to be briefer That partly reflects the changing nature of energy usage and geographical sources of supplies U S shale oil producers can now step up to offset price spikes stemming from Gulf supply disruptions regardless of local politics or OPEC action while the rise of renewable energy sources amid fears of climate change is happening at a rapid pace
Paul Donovan of UBS Wealth notes that technology developments mean far less oil is needed to produce a dollar of global GDP today
Donovan also highlighted that back in 1973 energy producing countries squirreled away extra oil earnings as savings causing a net shock to global economic demand as that money drained from oil buyers pockets
In 2020 oil sellers spend that money with abandon and so a higher oil price does not mean a big drop or potentially any sort of drop in economic demand
LEARNING FROM THE PAST
Of course wars and invasions have driven big market shifts in the past causing mini panics and safe asset buying on fears for business confidence trade and energy prices
But the experience over recent decades has been that all things equal markets tend to recover quickly and portfolio managers with the stomach to see through short term lurches do well even without expensive hedging
A recent Schroders LON SDR report identified the 1990 Gulf War the 2001 9 11 attacks on New York and the 2003 Iraq invasion as the most monumental geopolitical risk events of the past 30 years
GRAPHIC Geopolitical risk GPR index
In 2003 yields on German government bonds among the world s most trustworthy assets tumbled almost 70 basis points between March and June they fell a similar amount in 1990
When you look at the last few decades of history whenever a prolonged war is the more likely outcome that s when the rush to government bonds takes place said Rabbani Wahhab senior portfolio manager at London and Capital
Schroders noted that during periods of extreme risk a portfolio of safe assets comprising bonds and gold usually outperformed riskier equities
However it also found that in all these instances shares recovered within months suggesting that if investors are willing or able to ignore volatility then investing in the risky portfolio represents a better strategy than a safe portfolio
ALL CHANGE IN MARKETS
The market context itself has also changed over the decades most prominently by years of near zero interest rates and central bank money printing that have inflated prices of high quality bonds reduced benchmark borrowing costs and cut what s available to investors
Shares meanwhile have been pumped up by buybacks and abundant private funding that have steadily reduced equity supply over the years With JPMorgan NYSE JPM predicting equity supply to decline by a further 200 billion this year many investors have come to view selloffs as a buying opportunity
The demand supply nature of markets has completely changed said Salman Ahmed chief investment strategist at Lombard Odier
Central banks have reduced the supply of safe assets and that s rippled out to risky assets It s a very powerful force |
JPM | JPMorgan Chase raises fee on popular Sapphire Reserve credit card | NEW YORK Reuters JPMorgan Chase Co N JPM said on Wednesday it was raising the annual fee for its popular Chase Sapphire Reserve credit card by 100 according to a press release from the bank Starting on Jan 12 all new applicants for the card will be charged a 550 annual fee up from 450 After April 1 all existing cardholders will be charged the higher annual fee when it comes time for their annual renewal The largest U S bank said in the statement that the price increase comes as it expands its program of travel rewards and ways to earn points The bank has also struggled to manage the expense of the Sapphire Reserve card which annually gives customers hundreds of dollars in travel credit and rewards points for a range of transportation expenses like airline flights roadway tolls and subway fares More than 40 million U S households have a credit card from JPMorgan which comprises about 19 percent of the market executives have said The bank is gambling that customers will deem the Chase Sapphire Reserve cards which launched in 2016 valuable enough for its rich rewards and travel perks that they do not mind the 100 price increase This week the bank announced new partnerships with the ride hailing app Lyft Inc O LYFT and the food delivery services DoorDash Inc Starting Jan 13 Sapphire Reserve cardholders will get 10 points per dollar spent on Lyft rides and a free year subscription to Lyft s membership program Lyft Pink which gives users discounted rides and other perks
This story has been refiled to fix typographical error in paragraph 6 |
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